Contents

2023 Annual Report

To the shareholders of Pampa Energía S.A. (‘Pampa,’ the ‘Company’ or the ‘Group’):

Pursuant to the statutory rules and Bylaws currently in force, we submit for your consideration the Annual Report and Financial Statements for the 80th fiscal year that ended December 31, 2023.

In 2023, we set a new milestone in our mission of being leaders in energy efficiency, reaching a record investment of nearly US$1.2 billion between Pampa and its affiliates. This achievement was reflected in the record gas production from Vaca Muerta and additional clean and efficient installed power capacity through the CTEB’s CCGT, PEPE IV and PEPE VI, contributing significantly to Argentina’s energy matrix.

Evolution of investments by Pampa Energía and 100% affiliates

In million US$

Our E&P production has continued growing steadily, and in 2023, it has positioned us once again as a natural gas benchmark in the Neuquina Basin, and therefore, the country, with local sales mostly sold under contracts until 2028, and also as one of the leading gas exporters to Chile.

After many years of standing out as a tight gas producer, in 2023 we leaped into massive shale gas production, connecting 23 wells to the Vaca Muerta formation from El Mangrullo and Sierra Chata blocks and raising peak gas production to over 16 million m3 per day during the winter, the most critical supply period. This milestone was achieved thanks to the commissioning of the new GPNK, one of the country’s main infrastructure works in recent years, which allowed greater gas evacuation from the Neuquina Basin to the east. From it, Pampa was awarded the supply of the pipeline’s 44%. This record not only contributed to the production of an essential fuel for energy transition, but also reduced burdensome imports and subsidies and brought foreign currency to the Argentine economy through exports.

In 4 years and investing over US$1.1 billion, we doubled peak gas production

In million m3/day and invested US$

Our blocks' productivity and shale gas potential were our hallmarks to be competitive, continue gaining market positioning and replenish almost twice the annual production, recording an 11% year-on-year increase in proven reserves to 199 million boe. Thanks to the active campaign in Vaca Muerta, we have almost doubled the certified shale volume to 83 million boe, representing 42% of Pampa’s total P1 reserves (vs. 44 million boe or 24% of P1 reserves in 2022). Even with growing production, we have maintained an average life of 8.6 years.

Moreover, in August 2023, we acquired Rincón de Aranda, a block at the heart of Vaca Muerta’s shale oil window. Although not currently in production, the block shows excellent potential due to its proximity to major areas. In 2024, we will start developing the pilot plan to connect the well drilled in 2018 and complete the other eight wells. We aim to replicate the success stories of the El Mangrullo and Sierra Chata blocks, with the forward-looking expectation of adding reserves and production and exceeding 100 thousand boe per day of gas and crude oil from Vaca Muerta by 2027.

In 2023, we maintained our leadership as the country’s largest independent power generator, operating 5,332 MW and contributing 15% of the country’s total generation. Thanks to the investments made over the last few years, the ‘new’ or PPA-covered capacity stands for 31% of the total operated capacity, while its contribution to EBITDA has reached 68% of the business. Despite the gap between both types of energy, we have once again reached a high thermal availability level in our power plants, close to 92%, in contrast with the system’s declining trend.

Evolution of thermal generation availability

In % of rated capacity

In February 2023, we commissioned the closing to combined cycle at Ensenada Barragan. This expansion required more than US$250 million and added 280 MW, substantially increasing the plant’s dispatch thanks to efficient fuel consumption. We also continued adding more renewable power through the commissioning of PEPE IV, with an 81 MW capacity and an approximate US$130 million investment. Also, in early 2023, we started building our ambitious PEPE VI project, planning to add 140 MW of wind power with an over US$270 million investment. Its progressive commissioning is expected to begin this year, and total completion is estimated for the third quarter of 2024.

Once all ongoing expansions are commissioned, Pampa will operate a total projected capacity of 5,471 MW, of which 427 MW will come from wind energy, positioning ourselves as a leader in this segment.

Despite pricing and volume challenges, 2023 was another remarkable year for our petrochemicals segment, mainly thanks to excellent operational management and increased export volumes, this business being the largest contributor to Pampa’s exports.

Finally, despite the complex local and international context, in 2023 we achieved our lowest indebtedness level in five years, recording a US$613 million net debt at year-end. In 2023, we were proactive in our liability management, canceling important maturities such as the 2023 international bond and placing successful issuances in the domestic market. Also, relying on our robust cash generation, we have substantially increased our liquidity, resulting in a 0.9x net debt ratio and demonstrating a solid financial position in line with strong investments to grow our asset base organically.

Besides maintaining the operational excellence characterizing our assets, our ESG approach has allowed us to continue reinforcing our commitment to the well-being of our teammates and contractors, the proximity with our stakeholders and, along with the Foundation, the support to the communities where we are present through our assets. All of this would not have been possible without the effort and dedication of the Company’s teammates and advisors, our families, suppliers, financial institutions and investors. That is why we would like to thank our shareholders for the continuous trust placed in us and share our enduring enthusiasm for investment and growth to continue consolidating as a benchmark in the Argentine energy sector.

As of the third quarter of 2023, economic activity recorded a 1.6% decrease compared to the same period in 2022, driven by the 6.8% and 0.4% drop in FOB exports (goods and services) and investments, respectively. However, 1.9% and 2.6% increases were recorded in private and public consumption, respectively. Growth was experienced in 11 out of 16 identified sectors of the economy, the most dynamic ones being mining and quarrying (+7.7%), hotels and restaurants (+6.4%) and teaching (+2.6%). In contrast, agriculture, livestock, hunting and forestry (-25.8%) and fishing (-7.1%) contracted the most.

Regarding the evolution of prices, the National Cost of Living Index published by the INDEC showed a 211.4% variation in 2023. The most significant increases were recorded in food and non-alcoholic beverages (+251.3%), household equipment and maintenance (+231.7%) and health (+227.7%). Furthermore, as measured by the registry of Stable Workers’ Average Taxable Remuneration (Remuneración Imponible Promedio de los Trabajadores Estables, RIPTE), salaries experienced a 142.7% year-on-year increase as of November 2023.

As of December 2023, the Non-Financial Public Sector’s fiscal accounts accumulated a 3.2% and 7.1% primary and financial deficit to GDP, respectively. The annual variation in tax revenues, measured in AR$ based on figures published by the AFIP (Federal Administration of Public Revenue, Administración Federal de Ingresos Públicos in Spanish), ended with a 113.3% year-on-year increase. Moreover, primary expenditures recorded by the National Treasury showed a 123.0% year-on-year variation.

Regarding the foreign exchange situation, the BCRA’s US$ currency wholesale FX rate (Res. A3500) closed at AR$808.48/US$ on December 31, 2023, showing a cumulative 356.4% increase against the end of 2022 and an average 125.7% year-on-year variation. BCRA’s international reserves totaled US$23.1 billion, representing a US$21.5 billion decrease compared to the level reached at the end of 2022. The monetary base reached AR$9,608 billion at the end of 2023, showing an 84.6% year-on-year increase. In addition, BCRA’s debt stock in issued bonds totaled an equivalent amount expressed in dollars of US$38.4 billion as of the closing of 2023, representing a 35.1% year-on-year decrease.

Finally, on the external front, according to INDEC’s data, the cumulative current account deficit amounted to US$18.2 billion as of the third quarter of 2023, representing 3.4% of the GDP, mainly due to the trade deficit. The Free on Board (FOB) value of exports totaled US$66.8 billion (-24.5%), while the Cost, Insurance and Freight (CIF) value of imports reached US$73.7 billion (-9.6%). The drop in exports is explained by decreases in primary products (-39.4%), agricultural manufactures (-27.9%), industrial manufactures (-10.4%) and fuels and energy (-7.4%). Regarding imports, the drop is explained by decreases in fuels and lubricants (-38.4%), capital goods (-11.3%), consumables (-7.3%), automotive (-7.3%) and intermediate goods (-5.1%).

At Pampa, we believe that the best way to preserve and protect our investors is to adopt and implement the best corporate governance practices. This approach consolidates us as one of the market’s most trustworthy and transparent companies. For this purpose, we constantly strive to incorporate those practices, considering international market trends and applicable domestic and foreign corporate governance standards and rules.

In this sense, Pampa is a member of the special stock quote panel called +GC Panel, which ByMA sponsors. The +GC Panel includes companies listed at ByMA with single-vote shares that follow the best corporate governance and transparency practices, even beyond the required regulatory level. Pampa fulfills all these practices, which are subject to periodic review for compliance and aligned with the Corporate Governance principles of the Organization for Economic Co-operation and Development (OECD) adopted by the G20.

Further information on Pampa’s corporate governance practices can be found in Appendix I of this Annual Report, which incorporates the corporate governance report required under the Code per Section 1, Title I, Chapter I, Part IV of the CNV Rules, as restated in 2013 and amended by CNV General Res. No. 797/19.

As of December 31, 2023, Pampa’s capital stock consisted of 1,363,520,380 issued ordinary shares, each with a par value of AR$1 and granting the right to one vote. The following table shows information on Pampa’s common shareholdings:

Note: All figures are rounded, so the total may not equal the sum of the figures. 1 Direct and indirect stakes of Messrs. Marcos Marcelo Mindlin, Damián Miguel Mindlin, Gustavo Mariani and Ricardo Alejandro Torres.

Pampa is listed on the ByMA, participates in the S&P Merval and the sustainability (non-traded) indexes, and is a member of the special stock quote panel known as the +GC Panel.

Moreover, Pampa has a Level II ADS program listed on the NYSE. Each ADS represents 25 common shares. Our ADR takes part in Bloomberg’s gender-equality stock index (non-traded).

Board of Directors

Under the ABOL, the CMA and Pampa’s Bylaws, decision-making within the Company is vested in the Board of Directors. The Board consists of ten regular directors and an equal or smaller number of alternate directors, as determined by the Shareholders’ Meeting, a percentage of whom will be independent according to the independence criteria set out in the CNV rules. All our directors are elected for a term of three years and may be re-elected indefinitely, except for the restrictions arising from CNV’s independence standards. The expiration and further renewal of terms of office are made on a partial and staggered basis every year, with the election of three directors for two consecutive years and four directors the following year. Currently, Pampa’s Board is composed as follows:

Note: *They will be in office until their reelection or the election of their substitutes.

On September 12, 2023, and November 29, 2023, Mr. Darío Epstein and Mrs. María Renata Scafati resigned from their Regular Directors positions. Moreover, on November 22 and 29, 2023, Mmes. Diana Mondino and Emilse Juárez resigned as Alternate Directors. The Company’s Board approved these resignations at the meetings held on November 8 and December 14, 2023, and January 4, 2024, and their substitutes will be appointed at the next Shareholders’ Meeting of the Company.

Our senior management

The following table includes information on our senior management:

Supervisory Committee

Our Bylaws provide that Pampa’s oversight will be in charge of a Supervisory Committee consisting of three regular members and three alternate members appointed by our shareholders under the regulations in force. The Supervisory Committee will be composed of duly registered lawyers and/or accountants admitted to practice in Argentina, who will serve for a term of three fiscal years.

The Supervisory Committee’s primary responsibility is to exercise statutory control over the Board’s compliance with the provisions outlined in the ABOL, the Bylaws, their regulations, if any, and the decisions adopted at Shareholders’ Meetings. In performing these duties, the Supervisory Committee neither monitors our operations nor assesses the merits of the decisions adopted by directors. Currently, Pampa’s Supervisory Committee is composed as follows:

Note: * They will be in office until their reelection or the election of their substitutes.

Audit Committee

In line with Section 109 of the CMA, Pampa has an Audit Committee integrated by three regular members and an alternate member, who all hold independent status according to the independence standards in the CNV rules. The Audit Committee members have professional financial, accounting, legal, and/or business expertise.

Under the applicable legislation and its own internal regulations, the Audit Committee has, among others, the following duties:

Pampa’s Audit Committee is composed as follows:

Regarding protection of minority shareholders, Pampa’s Bylaws provide for:

Integrity Program – Law No. 27,401

Pampa complies entirely with the provisions of the Legal Entities’ Criminal Liability Law and the Integrity Program contemplated therein. The program aims to implement internal actions, mechanisms and proceedings to prevent, detect and correct misconduct and illegal acts covered by this law.

The Integrity Program is periodically reviewed by the Board, including the identification of potential improvements. Pampa’s Internal Audit Department is responsible for the program internally, including its development, coordination and supervision.

Code of Conduct

Pampa has a Code of Conduct approved by the Board that constitutes the guide for making honest decisions in daily activities and defines how to address challenges. It sets out core principles to ensure a service of excellence for our customers and build relationships with our suppliers, teammates, shareholders, authorities, intermediate organizations and the Pampa community.

Ethics Committee

We have a consultation body on the Integrity Program. Its main responsibilities include providing guidance on the Code of Conduct, following up on cases received through the Ethics Hotline, and rendering its opinion on disciplinary actions and conflicts of interest. This committee comprises the Human Resources, Legal and Audit Departments, with oversight of our CEO. It can be contacted personally or via email at etica@pampaenergia.com.

Ethics Hotline

Pampa offers the Ethics Hotline, an exclusive channel to report any suspected misconduct or breach of the Code of Conduct on a strictly confidential basis. This line is available through different channels (website, chat, toll-free telephone number or email) and is run by an external supplier, guaranteeing higher transparency. Moreover, it has a Procedure for handling complaints, updated in November 2023, which describes the process from the reception of an objection to the investigation’s conclusion and the potential application of corrective actions. The Audit Committee is responsible for supervising the channels’ operation and resolution of complaints in issues within its authority.

Policy against Fraud, corruption and other irregularities

This policy reaffirms transparency and ethics as essential behaviors to lead the Company’s business and achieve sustainable growth. It also prohibits fraud, corruption in any form or other acts of misconduct within Pampa. Moreover, it sets Pampa’s stance on preventing corruption and other acts of misconduct, complementing the principles and values defined in our Code of Conduct. Therefore, both documents should be read in conjunction. This Policy also includes clauses on the obligation to report any actual or suspected violation of laws and/or regulations, as well as the prohibition of retaliation against anyone filing a report legitimately and in good faith or refusing to participate in acts of corruption.

Policy on Best Security Market Practices

This policy outlines certain restrictions and formalities on trading Pampa and/or its affiliates’ marketable securities listed in a stock exchange. It ensures transparency and guarantees that no benefit or economic advantage is gained from misusing material non-public information about Pampa and/or its affiliates. It applies to all Pampa and its subsidiaries’ employees, including directors, members of the Supervisory Committee and Senior Management lines.

Policy on Related-Party Transactions

Under the CMA, the policy provides that all ‘high-value transactions’ between Pampa and individuals and/or legal entities that could be deemed ‘related parties’ will be subject to a specific prior authorization and control procedure. This procedure, coordinated by Pampa’s legal affairs executive department, involves both Pampa’s Board and Audit Committee, as applicable. The policy was reviewed and updated by the Board in 2021.

Board of Directors’ Self-Assessment Questionnaire

Pampa’s Board implements a Self-Assessment Questionnaire that allows for an annual analysis and assessment of its own performance and management. The legal affairs executive department is responsible for analyzing and filing the questionnaires. Each director answers the questionnaire individually and based on the results, proposes to Pampa’s Board all measures deemed proper to improve the performance of the Board’s duties.

Policy on Relevant Information Disclosure

This policy regulates processes for publishing relevant information per the regulatory requirements of the stock exchanges where Pampa’s securities are traded or those in which Pampa is a registered issuer.

Integrated Management Policy

This policy is an evolved version of the QHSE Policy, adapted to the Company’s present situation and the challenges it faces, driving the sustainable development of our businesses. It adds supplementary aspects to QHSE, such as the efficient use of energy and natural resources, the reliability and integrity of our facilities and operations, and asset management optimization. The policy reaffirms that integrated management is an essential part of our operations and includes ten management principles guiding its simple and agile implementation and strengthening Pampa’s culture.

Dividend Policy

This policy outlines the guidelines for balancing distributed amounts and Pampa’s investment plans. It aims to establish a clear, transparent, and consistent practice that allows informed shareholder decision-making that aligns with the Company’s Bylaws and the current regulations in force.

Compensation Policy

This policy’s main purpose is to establish general rules to determine the composition, updating and handling of directors’ remunerations, as well as rules for reimbursing their expenses. Under this policy, the Compensation Committee was created, which reports to Pampa’s Board and comprises three regular members and an equal or smaller number of alternate members who may not perform executive functions in the Company. Pampa’s Compensation Committee is composed as follows:

Nomination Policy

The Nomination Policy sets the general guidelines on independence, incompatibilities and diversity in the Board. It describes the process for naming and evaluating the Board’s nominees, either proposed by the Board or by shareholders, for consideration at the Shareholders’ Meeting.

Under this policy, the Board created the Nomination Committee, which aids Pampa’s Board and Shareholders’ Meeting in the Board members’ nomination and appointment process. This committee reports to Pampa’s Board, composed of three regular members and an equal or smaller number of alternate members. The Chair must be independent according to the criteria stipulated by the CNV rules. Pampa’s Nomination Committee is composed as follows:

In 2023, electricity consumption grew by 1.5% vs. 2022 —with a total electricity demand volume of 140,883 GWh and 138,755 GWh for 2023 and 2022, respectively— mainly driven by the residential segment.

The following chart shows the breakdown of electricity consumption in 2023 by type of customer:

Electricity demand by type of customer

Peak power capacity records

Source: CAMMESA.

On March 13, 2023, the SADI registered a 29,105 MW record-breaking demand for power capacity. However, on February 1, 2024, there was a new record-breaking demand of 29,653 MW.

1 For further information, see section 6.1 of this Annual Report.

Evolution of the electricity supply

Power generation experienced a 2% recovery in 2023, reaching 140,580 GWh volumes, against 137,932 GWh recorded in 2022. Greater water resources mainly account for this rise due to higher flows from the El Niño phenomenon and increased power generation availability. For the second consecutive year, in 2023 the SADI was a net power importer.

Increases in hydropower generation net of pumping (+9,138 GWh vs. 2022), nuclear power (+1,494 GWh) and renewable energy (+745 GWh) were partially offset by a decrease in thermal generation (-8,728 GWh).

Thermal power generation remained the primary source to meet the demand, using natural gas, liquid fuels (GO and FO), and mineral coal, contributing a 73,018 GWh electricity volume. Hydropower generation follows, contributing 38,514 GWh net of pumping, renewable energy with 20,085 GWh and nuclear energy with 8,963 GWh. Additionally, there were imports of 6,214 GWh (vs. 6,310 GWh in 2022), exports of 98 GWh (vs. 31 GWh in 2022) and losses of 5,840 GWh (+7% vs. 2022).

The following chart shows the evolution of electric power generation by type of technology:

Generation by type of power plant

In % and TWh, 2014 - 2023

Power generation in Argentina grew by 846.9 MW in 2023, reaching a total of 43,774 MW as of December 2023. This rise is mainly due to the commercial commissioning of renewable units under RenovAr and MAT ER programs (+657.4 MW), as well as thermal facilities, most of them under SEE Res. No. 287/17 and SE Res. No. 220/07 (+335.4 MW), including CTEB’s cycle closing (+281 MW). These increases were partially offset by power capacity adjustments (-8.7 MW), unit recategorizations (-68.0 MW) and terminations (-69.2 MW).

The following table summarizes the incorporation of new power units in 2023:

Source: CAMMESA and Pampa Energía’s analysis.

The composition of Argentine installed power capacity as of December 31, 2023, is shown below:

2023 Argentine installed power capacity

100% = 43.8 GW

Fuel supply and consumption

Under the Ministry of Productive Development (former SGE) Res. No. 12/19, fuel commercial management and procurement for power plants were centralized in CAMMESA from December 30, 2019, except for generators with PPA under Energía Plus and SEE Res. No. 287/17. However, due to the implementation of Plan Gas.Ar (SE Res. No. 354/20), an optional scheme was established granting exempted generators the option to assign the operation of natural gas supply and its transportation to CAMMESA, effective January 2021. Pampa opted into this scheme. The new scheme set a new thermal dispatch order centralized in CAMMESA, prioritizing units supplied with gas imported from Bolivia under a ToP condition, followed by those under Plan Gas.Ar and, lastly, units with gas assigned to CAMMESA.

Despite the drought and the increase in electricity demand, in 2023 fuel consumption reached a total of 44.9 million m3/day of gas equivalent, representing an 11% year-on-year decrease, explained by increased hydropower dispatch and mild temperatures. The use of natural gas for power plants reached 38.2 million m3/day in 2023 (-2% vs. 2022), 89% of which was local gas and 11% imported gas. Besides, the consumption of alternative fuels (FO, GO and mineral coal) was also lower than in 2022, especially during winter. The consumption of FO and GO decreased by 39% and 47%, respectively, reaching 2.2 million and 3.6 million m3/day of gas equivalent, as well as mineral coal consumption was reduced by 33% to 0.9 million m3/day of gas equivalent.

Fuel consumption by type

In % and million m3/day of gas equivalent, 2014 – 2023

Price of electricity

The energy authority has kept the policy launched in 2003, under which the WEM spot price is determined according to the available generating units’ CVP with natural gas, even if they are not generating electricity with this fuel (SE Res. No. 240/03). Any additional liquid fuel consumption cost is recognized outside the specified market price and considered a temporary dispatch surcharge. Moreover, the WEM bears the costs of natural gas and its regulated transportation, as well as the associated costs in case of import (SGE Res. No. 25/18 and SE Res. No. 354/20).

Evolution of WEM prices

As of November 2022, the approved maximum spot price for energy was AR$1.682/MWh (SE Res. No. 719/22), AR$2,691/MWh from May 2023 (SE Res. No. 323/23), AR$3,767/MWh from August 2023 (SE Res. No. 612/23) and AR$7,534/MWh from February 2024 (SE Res. No. 7/24). However, the following chart shows the average monthly price that all electricity system users should pay so that the power grid would not run into a deficit. In addition to the energy price, this includes the power capacity fee, the generation cost, fuels such as natural gas, FO, GO and mineral coal, and other minor items.

Average monthly monomic price

In US$/MWh

Remuneration scheme for generation without PPA - legacy energy

The main changes in legacy energy remuneration during 2023 are summarized below:

Thermal power generators

The remuneration comprises a fixed payment for the monthly available power capacity, with or without offering DIGO, and a variable remuneration for the generated and operated energy and that is generated during each month’s hours of maximum thermal demand. The prices for power capacity, in AR$/MW-month, for generators not offering DIGO are as follows:

The prices for power capacity, in AR$/MW-month, for generators offering DIGO are as follows:

Prices for generated energy according to fuel, in AR$/MWh, are as follows:

The price for operated energy was set at AR$204/MWh (Jan-23), AR$255/MWh (Feb-23), AR$326/MWh (Aug-23), AR$401 (Sep-23), AR$513 (Nov-23) and AR$892 (Feb-24), irrespective of the fuel type.

The price for generated energy at peak hours each month equals the prices for generated energy for the fuel type dispatched between 18:00 and 23:00, applying a 2.0 factor in the summer (Dec-Feb) and winter (Jun-Aug) periods and a 1.0 factor in the Mar-May and Sep-Nov periods.

Unconventional source power generators

The remuneration for energy generated from any unconventional source was set at AR$4,090/MWh (Jan-23), AR$5,113/MWh (Feb-23), AR$6,545/MWh (Aug-23), AR$10,304/MWh (Nov-23) and AR$17,919 (Feb-24). This price is reduced by 50% for energy generated before commissioning.

Hydropower generators

The remuneration for hydros includes a fixed payment for the monthly available power capacity and a variable pay for generated and operated energy and that generated at peak hours. In addition, a 1.05 factor is maintained on the power capacity to compensate for programmed maintenance’s impacts, and a 1.20 factor for units in charge of maintenance of control structures on river courses and not having an associated power plant. The following chart shows power capacity prices in AR$/MW-month:

The price for generated and operated energy was set in AR$/MWh:

The price for generated energy at peak hours each month equals the prices for energy generated between 18:00 and 23:00, applying a 2.0 factor in the summer (Dec-Feb) and winter (Jun-Aug) periods and a 1.0 factor in the Mar-May and Sep-Nov periods.

Classification of Pampa’s legacy energy units

Note: 1 Only applicable to the unit’s 26 MW. 2 A 1.20 multiplier to the remuneration.

In the case of CTG’s GUEMTG01, EcoEnergía and CTGEBA’s GEBATG03 units, energy and available power capacity under no contractual commitments will be remunerated as legacy energy, excluding from the transaction the cost of fuel provided by CAMMESA.

Non-spot remuneration for conventional energy

Energía Plus

In September 2006, the SE approved Res. No. 1281/06 implementing the Energía Plus scheme to encourage the development of new power generation supply. This program allows generators to install new units to sell to GU300 energy above the base demand (electricity consumption for 2005) at a negotiated price, provided the fuel supply and transportation are secured. Generators not meeting Energía Plus demand should purchase that power in the spot market.

The SE established GU300, which does not purchase its Surplus Demand within the Term Market, should pay the Surplus Demand Incremental Average Charge (Cargo Medio Incremental de la Demanda Excedente, CMIEE). The difference between the actual cost and the CMIEE would be monthly accumulated in an individual account for each GU300 within CAMMESA’s scope (Note No. 567/07, as amended). From June 2018, the CMIEE became greater between AR$1,200/MWh and the temporary dispatch surcharge (SE Note No. 28663845/18). Additionally, it was provided that, until further instruction, movements in each GU300’s individual account would temporarily not be recorded.

CAMMESA’s price variation adjusts part of Energía Plus PPA prices and are US$-denominated. In 2023, the energy demand remained high, with a significant degree hired under Energía Plus. From January 2021, with the implementation of Plan Gas.Ar, Pampa assigns gas supply and transportation to CAMMESA. CTG, EcoEnergía and CTGEBA provide the Energía Plus service to different WEM customers, with a 283 MW total gross capacity.

SE Res. No. 220/07

Aiming to encourage new investments to increase generation supply, the SE passed Res. No. 220/07 empowering CAMMESA to execute PPAs with WEM generating agents for the energy produced with new generation equipment. These are long-term PPA denominated in US$, and the price payable by CAMMESA should compensate for the investment made by the plant at a rate of return accepted by the SE.

79 MW from CTLL’s TG04 and CTEB’s 279 MW expansion are remunerated under this scheme until July 2026 and February 2033, respectively.

SEE Res. No. 21/16

In March 2016, the SEE launched a call for tenders for new thermal power generation capacity, committed to making it available in the WEM between 2016 and 2018. Successful tenderers entered a PPA for a fixed price (US$/MW-month) and a variable price excluding fuels (US$/MWh) with CAMMESA, which functioned as counterparty for distributors and the WEM’s GU.

The units remunerated under this regulation are CTLL’S GT05 (105 MW) and CTPP (100 MW) until August 2027 and CTIW (100 MW) until December 2027.

SEE Res. No. 287/17

On May 10, 2017, the SEE issued Res. No. 287/17 launching a call for tenders for co-generation and the closing to CCGT of existing equipment. Projects should have low specific consumption/high thermal efficiency and not exceed existing transmission capacities; otherwise, the tenderer would bear the cost of necessary expansions.

Awarded projects are remunerated under a 15-year PPA for an available power capacity price plus the non-fuel CVP for the delivered energy and the fuel cost (if tendered), minus the penalties and fuel surpluses. Power capacity surpluses are remunerated as legacy energy.

Under this regulation, CTGEBA has a 400 MW gross capacity PPA until July 2035. With the implementation of Plan Gas.Ar, as of January 2021 CTGEBA assigns gas supply and transportation to CAMMESA. Besides, a centralized dispatch order was established considering the fuel designated for generation.

SE Res. No. 59/23

To promote the maintenance and efficient use of CCGT under the legacy energy scheme, on February 7, 2023, the SE published Res. No. 59/23 calling generators to execute a Power Capacity Availability and Efficiency Improvement Agreement with CAMMESA for a maximum term of 5 years. Adhering units undertake to keep an 85% net power capacity availability. The PPA offers a US$2,000/MW-month power capacity price, adjusted based on availability, adding a partial payment of the power capacity price in AR$ under the legacy energy scheme.

The generated energy price was US$3.5/MWh for natural gas, US$6.1/MWh for FO or GO, and US$8.7/MWh for biofuel. The price for energy operated and generated at peak hours is set in AR$ according to the legacy energy price scheme.

Moreover, on March 15, 2023, the SE established the implementation criteria, especially the following: (i) CCGT partially committed under other PPA could opt in, excluding self-generators with associated industrial or commercial demand; (ii) the scheme’s term could not begin after January 1, 2024 or extend beyond May 31, 2028; and (iii) power generators could request the termination, subject to the SE’s approval, by proving that the supplementary remuneration resulting from the legacy energy does not reflect cost variations.

Under this scheme, Pampa signed the CCGT at CTLL and CTGEBA (1,243 MW total gross capacity) and the GTS at CTEB, which are part of the CCGT inaugurated in February 2023 (569 MW gross capacity). This differential remuneration became effective on March 1, 2023, and will continue until February 29, 2028.

TERConf: call for tenders to install thermal power capacity

On July 27, 2023, a call for tenders was launched to install between 2,250 and 3,000 MW of thermal generation or co-generation to replace or increase existing capacity and improve the SADI’s reliability and sustainability. In total, 66 projects for 7,112 MW were submitted. On November 24, 2023, 29 projects for 3,340 MW were awarded under SE Res. No. 961/23.

The call stipulated that the awarded projects would enter into a PPA with CAMMESA for up to 15 years and would be commissioned from 2025 and no later than 2028. The PPA remunerated a price per base power capacity ranging from US$9,000 to US$19,800/MW-month (depending on the line item under the call), operation and maintenance in US$/MW-month, a variable charge in US$/MWh depending on the fuel used, and the cost of the associated fuel, if offered.

Pampa was awarded the installation of a 300 MW GT in CTGEBA and an 11 MW capacity increase at CTEB. However, on December 28, 2023, the SE instructed CAMMESA to temporarily hold the issuance of commercial documentation for the guarantee’s tender maintenance payment.

Non-spot remuneration for renewable energy

In October 2015, Law No. 27,191 was enacted, providing that by December 31, 2025, 20% of Argentina’s total demand for energy should be covered with renewable energy sources. To meet this objective, WEM’s GU and CAMMESA should cover 20% of their demand with such sources by December 31, 2025. The average price under agreements entered with GU and GUDI may not exceed US$113/MWh.

Additionally, several incentives were established, including tax benefits (advance value-added tax return, accelerated amortization on the income tax, import duty exemptions, etc.) and the creation of the Fund for the Development of Renewable Energy (Fondo para el Desarrollo de Energía Renovables, FODER) destined for financing projects.

RenovAr

In 2016, RenovAr Program’s rounds 1 and 1.5 were launched (MEyM Res. No. 71/16 and 252/16). 1,142 MW and 1,281.5 MW were awarded under round 1 and round 1.5, respectively. In 2017, round 2 was called, and 2,043 MW were awarded (MEyM Res. No. and 275/17). Finally, in 2018, 246 MW were awarded under round 3 (MiniRen).

PEA (100 MW) is remunerated under RenovAr round 1 until March 2040. PEA also has a World Bank guarantee in case the PPA is terminated.

All greenhouse gas reductions resulting from projects under RenovAr or any other renewable power capacity project as per Law No. 27,191 should be considered as the Federal Government’s contribution target to meet the United Nations Framework Convention on Climate Change and the Paris Agreement.

In January 2022, due to significant delays in the completion of certain awarded projects and to recover the transmission capacity, the SE established, upon compliance with certain conditions, the following options: (i) terminating the PPA with the payment of US$17,500/MW (wind or solar projects) or US$12,500/MW (others) for the contracted power capacity; (ii) extending the term for commissioning, reducing the PPA’s term and price; or (iii) commissioning the project for a lower capacity.

In April 2023, the SE issued new provisions to regularize the penalties for delayed projects awarded under RenovAr, including installment payments and caps on discounts on economic transactions to cover fines (SE Res. No. 165/23). Besides, to release the committed transportation capacity under projects facing commissioning difficulties, a system was approved to request the termination of the PPA with CAMMESA against the payment of a fine equivalent to US$35,000 per MW of the project’s power capacity and the waiver of all rights, actions, claims and granted and unused tax benefits (SE Res. No. 162/23).

In November 2023, a penalty offsetting scheme was established for delays, shortcomings or national components against the commitment to making new renewable generation investments. This scheme provided a 36-month term for installing new renewable power capacity, which location and technology may differ from the original project.

MAT ER

MEyM Res. No. 281/17, issued in August 2017, regulated the MAT ER, a system that allows WEM GU and GUDI to purchase or self-generate clean energy to meet their supply obligation from renewable sources. MAT ER projects may not be committed under other remuneration mechanisms, such as the RenovAr Program.

Power generation exceeding commitments with MAT ER is remunerated for up to 10% of the power generation at the minimum price for the applicable technology under the RenovAr Program. The balance will be sold in the spot market. Moreover, the contractual terms —life, allocation priorities, prices and others, except for the maximum price set forth by Law No. 27,191— may be freely agreed between the parties under the WEM Procedures. However, committed volumes are limited to generators or suppliers that can execute MAT ER agreements.

In May 2023, the SE introduced several modifications, including granting a dispatch priority to joint incremental demand projects with new renewable generation and over incremental transmission capacity for projects financed at their own cost (SE Res. No. 360/23). The possibility of granting a ‘Referential A’ Dispatch Priority in corridors without full availability at all hours of the year stands out, with an expected probability of 92% of the typical annual energy. It is worth highlighting that this has been obtained for PEPE VI.

Under this scheme, PEPE II and III (106 MW) have sold energy since May 2019, and PEPE IV (81 MW) since February 2023. We estimate that we will add PEPE VI (140 MW) in the second semester 2024. The energy produced is sold under US$-denominated PPA with private parties for an average term of approximately 5 years.

On top of its own generation, since 2019 Pampa has sold renewable energy generated by third parties for an average volume of 10 GWh in 2023, contributing to increasing the MAT ER segment’s margin.

RenMDI

On February 2, 2023, the SE launched the RenMDI round to add 120 MW of new renewable capacity to substitute forced generation for 500 MW, thus diversifying the energy matrix (SE Res. No. 36/23). 514 MW were awarded at an average price of US$73.1/MWh, whereas 120 MW were awarded for the energy matrix diversification at an average price of US$145.8/MWh. Successful tenderers entered into a 15-year PPA with CAMMESA. Pampa has not participated in this call.

‘País’ tax exemption

On August 10, 2023, LNG, natural gas, electric power and good imports for the GPNK’s construction and commissioning, the Northern Gas Pipeline reversal and works under the Transport.Ar Program were exempted from the ‘País’ tax as per SE Res. No. 671/23. Later, SE Res. No. 714/23 extended the exemption to goods for power generation-related works. This exemption covers PEPE IV and PEPE VI works.

Evolution of the high-voltage transmission system

The following chart shows the evolution of the transformation capacity’s cumulative growth and the number of km of high-voltage transmission lines, compared to peak demand’s cumulative percentage growth since 1992.

As can be observed, the High-Voltage Transmission System has grown significantly since 2005, mainly due to the implementation of the 500 kV Federal Transmission Plan. The Federal Plan’s execution has substantially contributed to bringing greater stability to the SADI, thus improving supply conditions to meet the rising demand.

Evolution of the transmission system

Cumulative growth (in %)

Transener’s tariff situation

In September 2019, Transener received the last semiannual tariff update under the RTI, implemented in February 2017. Subsequently, with the entry into effect of the Solidarity Law in December 2019, no changes were implemented in electricity transmission tariffs under federal authority.

However, due to the evolution of macroeconomic variables, from February 2022, Transener and Transba experienced transitionary tariff increases for cost variations on account of the future RTI. In fiscal year 2023, Transener and Transba received, respectively, the following updates to their tariff schemes:

2 For further information, see Transener’s description in section 6.4 of this Annual Report.

Regarding the RTI, the Solidarity Law delegated the power to provide for a new review to the PEN, launched on December 17, 2020 (DNU No. 1020/20) and successively extended. On May 29, 2023, the ENRE approved the transmission RTI schedule (Res. No. 421/23).

Finally, on December 18, 2023, DNU No. 55/23 declared an emergency in the national energy sector, covering the electricity generation, transmission and distribution and natural gas transportation and distribution segments, effective until December 31, 2024.

To ensure the proper provision of public utilities, the SE was instructed to implement measures procuring free competition, low barrier pricing, and maintaining regulated income in purchasing power terms. Also, RTI processes were launched for electricity and natural gas transportation and distribution, which entry into effect may not exceed the end of 2024. In this context, the ENRE held a public hearing to address the tariff update and the monthly updating index. Through ENRE Res. No. 104/24 and 105/24, 179.7% and 191.1% increases were established over Transener and Transba’s November 2023 tariff schemes, respectively, applicable as of February 2024. Also, from May 2024, a formula combining wages, wholesale and consumer prices was determined to update tariffs monthly.

Additionally, the DNU seeks to create a single National Regulatory Authority for Gas and Electricity (Ente Nacional Regulador del Gas y la Electricidad), which would eventually replace ENRE and ENARGAS.

The Argentine energy matrix

Natural gas and oil constitute the main energy sources in the national primary energy matrix. The following chart illustrates their shares as of December 31, 2022, as there is no available information for the year 2023:

2022 Argentine energy matrix

100% = 78.1 million Tons of oil equivalent

Natural gas

In 2023, total gross natural gas production amounted to 132 million m3 per day, experiencing a 0.8% decrease vs. 2022, mainly due to the decline in the Austral and Noroeste Basins (-2.2 million m3 per day), partially offset by the commissioning of the first section of the GPNK, inaugurated in August 2023, which was supplied with additional Plan Gas.Ar from the Neuquina Basin (+1.0 million m3 per day), and a slight increase in the Golfo San Jorge Basin (+0.1 million m3 per day). In terms of net production, the decrease was marginal (-0.2%, to 121 million m3 per day).

The total demand recorded a 3% year-on-year decrease, mainly due to better climatic factors in the second half of the year and the substantial reduction of natural gas imports from Bolivia (-40% vs. 2022, to 6.2 million m3 per day), partially offset by higher LNG purchases (+9% vs. 2022, to 6.8 million m3 per day). On the other side, natural gas exports to Chile decreased by 8% against 2022, totaling 5.9 million m3 per day, representing 5% of the total domestic production in 2023.

Based on the most recent annual information published by the SE, as of December 31, 2022, the country’s total natural gas reserves and resources amounted to 1,675 billion m3, representing a 3% increase vs. 2021. Of the total, 27% were proven reserves, and 74% came from unconventional formations.

3 For further information, see Transener’s description in section 6.2 of this Annual Report.

Evolution of natural gas production, and reserves and resources*
In billion m3, 2012-2023

Oil

In 2023, total oil production increased by 9% vs. 2022, reaching 635.3 kbbl per day. This increase was mainly due to international reference prices and improved evacuation capacity from Vaca Muerta in Oldelval and OTASA’s systems. Of the total production, 63% and 32% came from the Neuquina and the Golfo San Jorge Basins, with 402.1 and 200.6 kbbl per day production, representing a 17% increase and a 1% decrease vs. 2022, respectively.

Evolution of oil production, and reserves and resources*

In million boe, 2012-2023

As for the local refining demand, a 6% year-on-year increase was recorded, reaching 518.7 kbbl per day. This volume was mainly supplied from the Neuquina Basin, with 321.7 kbbl per day (+9% year-on-year) and the Golfo San Jorge Basin, with 176.7 kbbl per day (+3% vs. 2022). The other productive basins contributed 20.3 kbbl per day (-13.2% year-on-year). Moreover, it is worth highlighting that in 2023 there were no oil imports, and exports were 5% higher than in 2022, reaching 120.9 kbbl per day and representing 19% of total local production, explained by evacuation infrastructure improvements.

As of December 31, 2022, the country’s oil reserves and resources totaled 10,521 million barrels, a 10% increase vs. 2022, of which 28% were proven reserves and 67% were classified as unconventional.

The Argentine Hydrocarbons Law

On October 29, 2014, the National Congress enacted Law No. 27,007, amending Hydrocarbons Law No. 17,319. Among other aspects, this law addresses new industry drilling techniques, introduces changes to terms and extensions of exploration permits and exploitation concessions, levies and royalty rates, and incorporates concepts for on and offshore unconventional exploration and exploitation and the promotion regime established under Executive Order No. 929/13.

Unconventional hydrocarbons exploitation

The Law conferred legal status to the ‘Hydrocarbons Unconventional Exploitation Concession’ concept created by Executive Order No. 929/13. This term is defined as the extraction of liquid and/or gaseous hydrocarbons by unconventional stimulation techniques applied in reservoirs situated in geological formations of schist rock or slate (shale gas or shale oil), tight sandstone (tight sands, tight gas, tight oil), coal bed methane and/or characterized by the presence of low permeability rocks.

Holders of hydrocarbon exploration permits and/or exploitation concessions may request an unconventional exploitation concession to the enforcement authority under certain terms, allowing the subdivision of the existing block into new unconventional hydrocarbon exploitation blocks and granting an unconventional hydrocarbon exploitation concession. This request must be based on developing a pilot plan for commercially exploiting the discovered field. A unification of adjacent unconventional blocks as a single exploitation concession may also be requested, provided their geological continuity is reliably demonstrated. This request should be based on the development of a pilot plan.

Terms for concessions and permits

The terms for the exploration permits will be established in each call for tenders issued by the enforcement authority according to the exploration’s target (conventional or unconventional):

Upon expiration of the basic term’s first period, the permit holder will decide whether to continue exploring the block or entirely transfer it back to the Government. The originally granted block may be kept if the permit obligations are met. If the exploration permit holder exercises the right of extension at the expiration of the basic term, the reversal will be limited to 50% of the remaining block.

Exploitation concessions will be granted for the following terms, computable from the granting resolution’s date:

Moreover, the holder may request indefinite 10-year extensions provided it has met its obligations, hydrocarbons are produced in the block, and an investment plan consistent with the concession’s development is submitted.

Awarding of blocks

Law No. 27,007 proposes a standard bid form drawn up by the SE and the provincial authorities. All calls for tenders will adjust to this bid form. The law introduces the ‘greater investment or exploration activity’ criterion as a tiebreaker at the PEN or the Provincial Executive Branch’s duly supported discretion, as applicable.

Levy and royalties

Levy

Law No. 27,007 sets the levy values per km2 or fraction to be paid annually and in advance by the permit holder. The exploitation permit will amount to AR$4,500, and the following values will apply to exploration permits: AR$250 in the first period and AR$1,000 in the second period of the basic term; and AR$17,500 during the first year of the extension, with a 25% annual cumulative increase. The amount may be readjusted by offsetting up to 10% of the levy with actual investments, according to the period and per km2.

In September 2019, the Province of Neuquén established new levy values per km2. The exploitation levy was set at AR$22,410, and the exploration levy at AR$1,245 for the first period, AR$4,980 for the second period, AR$7,470 for the third period, and AR$87,150 for the extension period (Executive Order No. 2032/19).

As of 2021, DNU No. 771/20 set a maximum levy in AR$ equivalent to a certain volume of oil, valued at the average domestic market price and the Argentine National Bank (Banco de la Nación Argentina)’s FX rate. For exploitation concessions, it amounts to the equivalent of 8.28 barrels. In contrast, the following applies to exploration permits: 0.46 barrels in the basic term’s first period and 1.84 barrels in the second period, and 32.22 barrels during the extension period.

Royalties

Royalties, the only monthly income on production mechanism collectible by the granting authorities, are set at 12% of the proceeds from liquid hydrocarbons and natural gas extracted at the wellhead. An additional royalty of up to 3% is applied in case of extension, reaching a maximum of 18% for next extensions.

The PEN or the Provincial Executive Branch, as applicable, acting as granting authority, may reduce the applicable royalties by up to 25% for 10 years following the pilot project’s conclusion in favor of companies requesting a hydrocarbon unconventional exploitation concession within a period of 36 months as from Law No. 27,007’s effective date.

Extension and exploitation bonds

Law No. 27,007 empowers the enforcement authority to set the payment of an exploitation concession extension bond. The maximum amount is calculated by multiplying the remaining proven reserves at the end of the concession period by 2% of the average basin price.

Moreover, the enforcement authority may establish the payment of an exploitation bond, which is calculated similarly and is associated with hydrocarbon’s conventional exploitation.

Transportation concessions

Transportation concessions, granted for the same term as the originating exploitation concession, may be extended successively for up to 10 years. Thus, the transportation concessions’ basic term will be 25 years in a conventional exploitation and 35 years in an unconventional exploitation, each plus any granted extension term. After these terms expire, the facilities will be transferred to the Federal or Provincial Government, as applicable, without any charges or encumbrances.

Uniform legislation

Law No. 27,007 provides for non-binding commitments between the Federal Government and the provinces, including uniform environmental legislation that applies the best environmental management practices to hydrocarbon exploration, exploitation, and/or transportation activities. It also provides a uniform tax treatment encouraging hydrocarbon activities, in which the gross receipts tax rate will not exceed 3% of sales.

Regarding taxation, it also undertakes to freeze the current stamp tax rate and not charge any financial contracts executed to structure investment projects. Besides, the provinces and their municipalities’ commitment not to impose new taxes or increase the existing ones is established, except for service compensation rates and improvement contributions.

Unconventional hydrocarbons exploitation concession (CENCH) in the Province of Neuquén

Given an unconventional reservoir’s low permeability and productivity over the last few years, the Ministry of Energy and Natural Resources of the Province of Neuquén set certain parameters for granting a CENCH, instrumented through Res. No. 53/20 (July 2020) and No. 142/21 (November 2021), and later ratified by Provincial Executive Order No. 2183/21 (December 2021).

Companies may request the CENCH based on a development project - Pilot Plan for up to five years, demonstrating its technical and economic feasibility, additional operational parameters, actual productivity assessments, costs and investment. Once the CENCH request is filed, a block extension bond payment is incorporated. The value will be associated with the resources expected to be recovered in the block, considering the basin’s average price over the last two years.

While the CENCH is in effect, holders must submit annual development plans and investment commitments (those undertaken for the following year will be deemed firm).

Regulations specifically applicable to the gas market

Plan Gas.Ar

Created on November 16, 2020, Plan Gas.Ar seeks to promote Argentine natural gas production and manage the gas cost impact on the Priority Demand’s tariff through tendering long-term supply agreements (DNU No. 892/20).

Initially, the term for onshore production was 4 years, with an additional 4 years for offshore production from January 2021. Later, the term was extended until December 31, 2028, for the 70 million m3 per day base volume already awarded under rounds 1 and 3 (DNU No. 730/22).

Agreements are executed between producers (as sellers) and CAMMESA, gas distributors and ENARSA (as purchasers), with a 100% daily DoP and a 75% monthly ToP for CAMMESA and quarterly ToP for gas distributors and ENARSA. The awarded price is adjusted by the following factors: 0.82 in the summer period (October – April), and 1.25 (May -September) for the base volume and 1.30 for the additional volume in the winter period. CAMMESA and ENARSA, as purchasers, pay the awarded price, while gas distributors pay the price set in the effective tariff scheme, with the difference being offset by the Federal Government. Moreover, the Federal Government has set a compensation support guarantee system based on tax credit certificates, aside other applicable mechanisms.

In December 2020, round 1 was awarded for an annual base volume4 of 67.4 million m3/day at US$3.5/MBTU from January 2021, and a winter additional volume of 3.6 million m3/day at US$4.7/MBTU from May 2021 (SE Res. No. 391/20 and 447/20).

Round 2 was awarded in March 2021, with an increasing daily DoP and a 75% quarterly ToP for a base volume of 3.3 million m3/day during winter at US$4.7/MBTU from June 2021 (SE Res. No. 169/21).

Round 3 was awarded in November 2021 for an annual base volume of 3 million m3/day at US$3.43/MBTU from May 2022 (SE Res. No. 1091/21).

Under the Transport.Ar program to increase gas transportation capacity through the GPNK, in December 2022, round 4 (Neuquina Basin) and round 5 (Austral Basin) were awarded (SE Res. No. 860/22). Rounds 4.1 and 5.1 extended a large part of the annual base volume until December 2028 under the following conditions:

Round 4.2 awarded new volumes until December 2028. Awardees may limit up to 30% of the volume committed with ENARSA for industrial customers and/or CNG, subject to SE’s approval. The calls were:

4 49.0 million m3/day is from the Neuquina Basin. Round 1’s base volume represents 70% of the total production commitment (96.3 million m3/day), and the remaining 30% is sold at market price.

5 Launched in August 2023 due to the delayed commissioning of the GPNK.

6 Beginning postponed to 2023.

Finally, round 5.2 awarded the incremental volumes set monthly in the Austral, Golfo San Jorge and Noroeste Basins for 3.3 million m3/day at US$7.319/MBTU from October 2023 to December 2028. The customers are ENARSA and CAMMESA, with an 80% daily DoP and a 0% monthly ToP (SE Res. No. 799/23).

Pampa awards under Plan Gas.Ar

Pampa participated and was awarded in all Plan Gas.Ar’s rounds in the Neuquina Basin. Each round’s conditions for Pampa are detailed below:

Note: 1 The total commitment from May 2021 is 7 million m3/day. Out of this, 4.9 are deliveries under Plan Gas.Ar and the balance is sold on the market. 2 1.25 adjustment factor in the winter and 0.82 for the rest of the year. 3 It covers the months of May through September. 4 Prices start at US$9.8/MBTU and drop to US$6/MBTU in 2028

Foreign exchange access regime

Aiming to promote and increase added value in the hydrocarbon’s activity value chain, DNU No. 277/22, issued on May 27, 2022, establishes a regime facilitating access to FX in the MULC for companies with incremental oil and gas production compared to 2021.

Access to the MULC under this regime will not be subject to BCRA’s prior authorization requirement in case exchange regulations so require. Foreign currency obtained under this regime is destined to pay principal and interest on commercial or financial liabilities abroad and with non-resident affiliates, dividends from closed and audited balance sheets, and non-resident companies' repatriation of direct investments. Benefits may be transmitted to direct suppliers.

For natural gas, the benefit equals 30% of the incremental injection valued at the country’s weighted average export price over the last 12 months, net of export duties. This price may not be lower than the weighted average award price under Plan Gas.Ar or higher than twice that value. For oil, the benefit equals 20% of the quarterly incremental production at the average Brent quotation over the last 12 months, defined by the enforcement authority, net of export duties, and adjusted based on the crude oil quality.

On January 13, 2023, through Res. No. 13/23, the SE established the conditions for companies to access the regime. Through notes issued in August and September 2023, the Undersecretariat of Hydrocarbons granted Pampa the certificates of access to the benefit corresponding to 3Q22, 4Q22 and 1Q23. In addition, Pampa sent applications for 2Q23, 3Q23 and 4Q23, which have not been granted as of this date.

Export Growth Program

To encourage oil and gas exports and strengthen BCRA’s reserves, SE Res. No. 808/23, which entered into force on October 3, 2023, allows hydrocarbon exporters to settle transactions under the Export Growth Program (Programa de Incremento Exportador —PIE—, DNU No. 576/22). PIE partially recognizes exports under a differential blue-chip swap (CCL) rate and the remaining balance under the official FX. Pampa opted into this regime. The evolution of percentages is summarized below:

Natural gas for the residential and CNG segment

Priority Demand and CEE

In June 2016, CEE criteria were established to guarantee the Priority Demand’s supply in case of operational emergencies (MEyM Res. No. 89/16, as amended). In June 2017, the procedure for administering dispatch in the CEE was approved (ENARGAS Res. No. 4502/17). If the CEE does not reach an agreement, ENARGAS defines the required supply considering each producer’s available quantities and deducting the amounts previously contracted to meet the Priority Demand, with a progressive allocation until matching the proportional quota of each producer/importer in the Priority Demand.

Natural gas prices within the PIST

As of January 2021, gas volumes for the Priority Demand are contracted under Plan Gas.Ar. Gas distributors pay the price stated in the effective tariff scheme and the difference with Plan Gas.Ar’s awarded price is offset by the Federal Government. ENARSA pays 100% of the Plan Gas.Ar’s awarded price.

Natural gas for power generation

As of December 30, 2019, power plants’ fuel supply was centralized in CAMMESA (except for generators with PPA under Energía Plus and SEE Res. No. 287/17). CAMMESA launches calls on an interruptible basis to cover its monthly consumption, and since 2021, most gas to CAMMESA has been supplied under Plan Gas.Ar. Generators under Energía Plus and SEE Res. No. 287/17 PPA can assign natural gas operation and transportation to CAMMESA. Pampa opted into this scheme.

As of 2021, new reference PIST prices were set for the production out of Plan Gas.Ar, at US$2.3/MBTU in the summer period (October – April) and US$3.5/MBTU in the winter period (May – September) for the Neuquina Basin (SE Res. No. 354/20). In addition to Plan Gas.Ar, CAMMESA launches auctions with a maximum price equal to Plan Gas.Ar, with a 30% DoP clause, although the volume is not significant.

Natural gas export

On April 27, 2021, a procedure was regulated to authorize natural gas exports on a firm and preferential basis for Plan Gas.Ar awardees during the summer period, extendable to the winter period in case of oversupply at a specific basin, with the applicable authority’s prior approval (SE Res. No. 360/21). DNU No. 730/22, issued on November 4, 2022, allows exports on a firm basis in winter, prioritizing producers with competitive prices and/or a higher contribution under Plan Gas.Ar.

In November 2022, the SE introduced several amendments, including (i) a limitation on exports per producer to a maximum of 30% of the authorized volume per basin or 50% of the commitment under Plan Gas.Ar; (ii) quotas per basin for firm exports; (iii) the exported volume will be deductible from the Plan Gas.Ar commitment in the summer; and (iv) the minimum price will be the higher of a Brent percentage and the Plan Gas.Ar price with the adjustment factor (SE Res. No. 774/22).

For the October 2023-April 2024 summer period, authorized volumes are 9 million m3/day in the Neuquina Basin and 2 million m3/day in the Austral Basin. During the May through June 2023 winter period, the quota was 5 million m3/day in the Neuquina Basin, prorated among round 4.2’s awardees. From July to September 2023, another 3 million m3/day were authorized in the Neuquina Basin. For the May-September 2024 period, a firm exportable volume of 5 million m3/day was determined for the Neuquina Basin.

Pampa holds permits to export gas to Chile on a firm basis for a maximum volume of 1.5 million m3/day from October 2022 to April 2023, 2.2 million m3/day from May 2023 to June 2023, 0.9 million m3/day from July 2023 to September 2023, and 1.5 million m3/day up to the end of 2023. In addition, spot exports are made to Chile and Brazil, provided the enforcement authority authorizes them.

Regulations in the oil market

No reference price has been established for selling crude oil domestically as of this date. However, local refining companies validate prices below the export parity.

Liquid hydrocarbons export tax

As of May 2020, export duties are exempted if the international Brent price is equal to or lower than US$45/bbl, with progressive increases until the reference price reaches 8%, the cap to be recognized when the Brent price equals or exceeds US$60/bbl (DNU No. 488/20). In 2023, the rate remained at 8%.

Regulations in gas main pipeline transportation - TGS’s tariff situation

In April 2019, TGS received the last semiannual tariff update under the RTI, implemented in April 2017. Subsequently, with the entry into effect of the Solidarity Law in December 2019, no tariff changes were implemented in the natural gas main pipeline transportation under federal authority.

However, due to the evolution of macroeconomic variables, from February 2022, TGS received a 60% transitionary update on its tariff schemes for cost variations on account of the future RTI. The guidelines for this update were stipulated in a transitionary renegotiation agreement, which, among other measures, did not establish a mandatory investment plan and prohibited the distribution of dividends, the early cancellation of financial and commercial debts taken on with shareholders, and the acquisition of other companies.

7 For further information, see sections 6.2 about Oldelval and 6.4 about TGS of this Annual Report.

A public hearing was held on January 4, 2023, and TGS requested a 135% tariff update effective February 2023. However, on April 27 and 29, 2023, ENARGAS and the PEN approved and ratified, respectively, an addendum to the transitionary renegotiation agreement, including a transitionary 95% increase on the natural gas transportation tariff and the CAU, effective from May 2023 (DNU No. 250/23, ENARGAS Res. No. 186/23).

Regarding the RTI, the Solidarity Law delegated the power to provide for a new review to the PEN, launched on December 17, 2020 (DNU No. 1020/20) and successively extended. Finally, on December 18, 2023, DNU No. 55/23 declared an emergency in the national energy sector, covering the electricity generation, transmission and distribution and natural gas transportation and distribution segments, effective until December 31, 2024.

To ensure the proper provision of public utilities, the SE was instructed to implement measures procuring free competition, low barrier pricing, and maintaining regulated income in purchasing power terms. Also, RTI processes were launched for electricity and natural gas transportation and distribution, to be implemented by the end of 2024. In this context, on January 8, 2024, a public hearing —previously called through ENARGAS Res. No. 704/23— was held to address the tariff adjustment and the monthly update index. As of today, TGS’s tariff schemes have not been published yet. In addition, the DNU also intervenes in ENARGAS as of January 1, 2024, and seeks to create a single National Regulatory Authority for Gas and Electricity (Ente Nacional Regulador del Gas y la Electricidad), which would eventually replace ENRE and ENARGAS.

Finally, in September 2023, TGS submitted to ENARGAS a request for a 10-year natural gas transportation license extension, expiring in December 2027. The governmental authorities will address the request.

Presidente Néstor Kirchner gas pipeline

Under Res. No. 67/22 issued on February 7, 2022, the SE created the Transport.Ar National Production (Transport.Ar Producción Nacional) program, declaring the construction of the GPNK of national public interest and its supplementary works as a strategic project.

Moreover, DNU No. 76/22, issued on February 11, 2022, granted ENARSA a 35-year concession for this gas pipeline and created the FONDESGAS (Fondo de Desarrollo Gasífero Argentino) trust, with ENARSA as trustor and beneficiary, and BICE (Banco de Inversión y Comercio Exterior S.A.) as trustee.

The following works executed by ENARSA have been commissioned:

The expansion of TGS’s final sections, with the installation of 29 km of loops in the Neuba II Gas Pipeline, is expected to be commissioned in May 2024, generating an additional 10 million m3/day transportation capacity from Salliqueló to Greater Buenos Aires.

TGS is the technical operator of the GPNK’s first section, including its two compressor stations. This role was awarded by ENARSA on June 5, 2023, through a private call for tenders, assigning its operation and maintenance for a term of 5 years, extendable for up to 12 months. After executing a 5-year agreement, TGS is also the technical operator of the Mercedes Cardales Gas Pipeline.

Regulations specifically applicable to the LPG business

Household Gas Bottles’ Program and Propane for Grids Agreement

The Household Gas Bottles’ Program supplies LPG at subsidized prices (DNU No. 470/15, as amended), and the Propane for Grids Agreement are currently in force.

The Household Gas Bottles Program provides a defined LPG quota to fractionation companies to guarantee supply to low-income residential users at a maximum reference price. The maximum reference price for butane and propane producers under this program is shown below:

In August 2021, among other measures, transitory economic assistance was established, recognizing 20% of the billing for the August 2021 – December 2022 period of LPG sales destined for the Household Gas Bottles’ Program (SE Res. No. 809/21, as amended). Given the circumstances, participation in this program forces TGS to produce and sell LPG at prices ostensibly lower than market prices, which entails adopting the necessary mechanisms to minimize its negative impact.

Regarding the Agreement for the Supply of Propane Gas for Undiluted Propane Gas Distribution Grids (Propane for Grids Agreement), on August 28, 2023, TGS executed its 19th renewal, effective until December 31, 2023. This agreement stipulated the payment of compensation to participants, payable by the Federal Government, calculated as the difference between the sales price under this agreement and the export parity published monthly by the SE, although with significant delays in collection terms. The nineteenth extension allows payments with tax credit certificates, which producers may use to cancel hydrocarbon export duties. To date, such certificates have not been issued.

Export duty

As with hydrocarbon exports, as of May 2020, propane, butane and LPG are exempted from paying export duties as long as the international Brent price is equal to or lower than US$45/bbl, with progressive increases until the reference price reaches 8%, the cap to be recognized when Brent price equals or exceeds US$60/bbl (DNU No. 488/20). In 2023, the rate remained at 8%.

Regulations specifically applicable to crude oil transportation

In June 2016, OldelVal requested the RTI from the MEyM, aiming to adjust tariffs for a maintenance and investment plan guaranteeing the integrity, efficiency and reliability of the transportation facilities and service. Consequently, on March 10, 2017, the new US$-denominated tariff scheme was published, providing for an average 34% increase, effective from March 2017 (MEyM Res. No. 49/17).

On November 28, 2022, the SE requested Oldelval to initiate the corresponding procedures to update the tariff scheme applicable to transportation service carriers. As of December 31, 2023, Oldelval is preparing the five-year information the SE requires.

In 2022, Oldelval launched a call for tenders to award and contract the firm transportation service for the Allen-Puerto Rosales oil pipeline section corresponding to the Duplicar Project for a total of more than 314 kbbl per day through the execution of contracts, effective until the end of the concession. Pampa was awarded with a quota of 6,302 barrels per day.

On September 14, 2022, the SE granted the extension of the transportation concession for the main oil pipelines providing access to Allen and the Allen-Puerto Rosales oil pipeline, as well as its expansion, called Medanito-Puesto Hernández, for a term of 10 years as from November 14, 2027. Consequently, the concession will be extended until November 14, 2037.

Pampa is an independent energy company with active participation in the Argentine electricity and gas value chains:

We are the country’s largest independent operator in power generation, with an installed capacity of 5,332 MW, representing 12% of Argentina’s installed capacity. Considering the next 140 MW expansions at PEPE VI, our total installed capacity would be 5,471 MW.

The oil and gas segment comprises operated and non-operated blocks at Pampa’s stake. In 2023, our average production in Argentina reached 65.4 kboe/day, 93% corresponding to gas, consolidating ourselves as the country’s fifth largest gas producer.

In petrochemicals, Pampa owns two high-complexity plants, standing out as the only producer of styrene, SBR and polystyrene in Argentina, with a domestic market share between 94% and 100%.

Finally, our holding and others segment mainly comprises our 26.5% interest in TGS, the country’s largest gas transportation company, which operates 9,248 km of gas pipelines and an NGL plant at General Cerri with a production capacity of 1 million ton per year. Moreover, Pampa has a 26.3% indirect interest in Transener, which operates and maintains 86% of the Argentine high voltage transmission grid, covering 22.4 thousand km of lines.

Corporate structure as of December 31, 2023

The following tables summarize the 16 power generation assets operated by Pampa as of the closing of 2023:

8 For further information, see section 4.1 of this Annual Report.

The following chart shows Pampa’s market share in the power generation segment:

2023 net power generation

100% = 141,397 GWh

Hydroelectric generation

Located on the Atuel River in the Province of Mendoza, HINISA has held a 30-year concession for generating, selling, and marketing electricity from the Los Nihuiles hydroelectric system since June 1994. HINISA has an installed capacity of 265 MW, representing 0.6% of Argentina’s total capacity, and consists of three dams and three hydroelectric power generation plants (Nihuil I, Nihuil II, and Nihuil III), together with a compensator dam. Los Nihuiles System extends approximately 40 km, and its height ranges between 754 m and 1,251 m above sea level. From 1990 to 2023, its annual average generation was 778 GWh, with a record high of 1,250 GWh in 2006 and a record low of 428 GWh in 2022. Pampa has a 52% direct stake in HINISA’s capital stock.

In the same Province of Mendoza, on the Diamante River, HIDISA holds a 30-year concession, effective since October 1994, for generating, selling, and marketing electricity from the Diamante hydroelectric system. With a 388 MW gross power capacity, it represents 0.9% of Argentina’s total capacity and consists of three dams and three hydropower plants (Agua del Toro, Los Reyunos and El Tigre). The Diamante System extends approximately 55 km, and its height ranges between 873 m and 1,338 m above sea level. With an average annual generation of 526 GWh from 1990 to 2023, it recorded a high of 943 GWh in 2006 and a low of 303 GWh in 2022. Pampa holds a 61% direct stake in HIDISA’s capital stock.

Located in the Province of Neuquén, on the Limay River, the HPPL plant started operating in 1999 under a 30-year concession. HPPL has an installed capacity of 285 MW distributed in 3 Kaplan-type turbines, representing 0.7% of Argentina’s total installed capacity. The dam is made up of loose materials with a waterproof concrete side. It has a length of 1,045 m, a maximum height of 54 m and a crest of 480.2 m above sea level. Between 2000 and 2023, HPPL recorded a historical average annual generation of 928 GWh, with a record high of 1,430 GWh in 2006 and a record low of 494 GWh in 2016. HPPL’s concession is 100% owned by Pampa.

Wind power generation

PEMC is located on provincial route No. 51, 18 km from the City of Bahía Blanca, Province of Buenos Aires. The wind farm comprises 29 V-126 Vestas wind turbines, each with a 3.45 MW power capacity, an 87-meter hub height and a 48% load factor of P50. It has an installed capacity of 100 MW, representing 0.2% of Argentina’s installed capacity. Commissioned in June 2018, PEMC sells its energy to CAMMESA under the RenovAr program. From 2019 to 2023, its average annual generation was 383 GWh, with a generation record high of 409 GWh in 2020 and a record low of 364 GWh in 2023. Pampa was the sole shareholder of Greenwind, a company owning PEMC until August 16, 2023, when the asset swap with Total Austral S.A. (Argentine branch) was closed. In this transaction, Pampa transferred 100% of its stake in Greenwind in exchange for the remaining 45% of Rincón de Aranda, making Pampa the sole owner of this block.

PEPE II is located next to PEMC. It comprises 14 V-136 Vestas wind turbines, each with a 3.8 MW power capacity and a 120-meter hub height, having a 56% load factor of P50. It has an installed capacity of 53 MW, representing 0.1% of Argentina’s installed capacity. Commissioned in May 2019, its historical average annual generation has been 215 GWh since 2020.

PEPE III, PEPE II’s twin wind farm with a 63% load factor of P50, is in Coronel Rosales, on national route No. 3, 45 km from the City of Bahía Blanca, Province of Buenos Aires. As of 2020, its historical average annual generation was 238 GWh. PEPE II and PEPE III are registered to issue IREC certificates.

The commissioning of PEPE IV, adjacent to PEMC and PEPE II, was completed on June 17, 2023. The wind farm was commissioned progressively: 18 MW (Dec-22), 18 MW (Feb-23), 9 MW (Apr-23), 9 MW (May-23) and 27 MW (Jun-23). PEPE IV contributes 81 MW of renewable energy to the national grid through 18 V-150 Vestas wind turbines of 4.5 MW each, with a hub height of 105 meters and a 63% load factor of P50. In 2023, generation amounted to 274 GWh.

PEA is located on provincial route No. 9, 90 km north of the City of La Rioja, Province of La Rioja. Acquired by Pampa Energía in December 2022, PEA comprises 38 Siemens Gamesa G-114 wind turbines, each with a 2.625 MW power capacity and an 80-meter hub height, with a 43% net load factor of P50. Its installed capacity is 100 MW, representing 0.2% of Argentina’s power capacity. PEA was commissioned in March 2020 and sells its energy to CAMMESA under the RenovAr program. As of 2020, its historical average annual generation was 328 GWh.

Finally, in May 2023, the construction of PEPE VI was announced. In the first and second stages, this wind farm will have a total of 31 Vestas wind turbines of 4.5 MW each, its gradual commissioning being estimated for July, September and October 2024, reaching a total installed capacity of 139.5 MW. The project also contemplates a third stage, expanding to 300 MW.

Thermal generation

CTG is in northwestern Argentina, in the City of Gral. Güemes, Province of Salta. Privatized in 1992, it has a 261 MW open cycle thermal power generation plant, with the addition in September 2008 of a GE gas-fired turbo generator unit of 100 MW, totaling 361 MW, which accounts for 0.8% of Argentina’s installed capacity. From 1993 to 2023, its average annual generation was 1,564 GWh, with a record high of 1,903 GWh in 1996 and a record low of 225 GWh in 2022 and 2023.

Also, in the north of the Province of Salta, CTP is in the small village of Piquirenda, Municipality of Aguaray, Department of General San Martín. Its construction started in early 2008 and finished in 2010; it has a 30 MW capacity, consisting of ten GE Jenbacher JGS 620 gas-fired engines, representing 0.1% of Argentina’s installed capacity. From 2011 to 2023, its average annual generation was 102 GWh, with a record high of 156 GWh in 2017 and a record low of 52 GWh in 2022.

Towards the south, in the Province of Neuquén, CTLL is located at Loma de la Lata, near which used to be one of the largest gas fields in Latin America known by the same name. Built in 1994, it consists of three GTs with an installed capacity of 375 MW, a 180 MW Siemens ST installed in 2011 for its closing to CCGT and repowered in January 2018, two 105 MW GE aero-derivative GT, installed in May 2016 and August 2017, and 15 MW from MAN gas engines in August 2021, totaling 780 MW, 1.8% of Argentina’s installed capacity. From 1997 to 2023, the average annual generation was 2,390 GWh, with a record high of 5,103 GWh in 2022 and a record low of 272 GWh in 2002.

On July 20, 2023, a technical problem occurred at CTLL’s GT #5. Pampa, jointly with the turbine manufacturer GE, is performing the necessary works to dismantle and repair the failure. Moreover, Pampa is making arrangements with insurance companies to collect compensation for the sustained damages and minimize losses resulting from the breach of availability commitments under PPA.

Pampa operates six CT in the Province of Buenos Aires. Three of them are near the City of Bahía Blanca: CPB, in the port of Ingeniero White, consists of 2 ST with a 310 MW capacity each, totaling 620 MW, equivalent to 1.4% of Argentina’s power capacity. The boilers can be fed with FO or gas. Gas is supplied through a proprietary 22-km gas pipeline, operated and maintained by CPB, connecting with TGS’s main gas pipeline system. Furthermore, CPB has two 60,000 m3 tanks for FO storage. From 1997 to 2023, the average annual generation was 1,845 GWh, with a record high of 3,434 GWh in 2011 and a record low of 189 GWh in 2002.

Located adjacent to CPB, CTIW consists of 6 dual-fuel (natural gas or FO) Wärtsilä engines, with a 100 MW installed power capacity, representing 0.2% of Argentine capacity. The high-efficiency engines, with a 46% performance rate, are interconnected to the 132 kV grid through a Transba substation. Liquid fuel is supplied using CPB’s unloading and storage facilities, and natural gas through the plant’s internal facilities. From 2018 to 2023, its historical average annual generation was 281 GWh, with a generation record high of 312 GWh in 2019 and a record low of 229 GWh in 2020.

Moreover, EcoEnergía, located on the outskirts of the City of Bahía Blanca, is a co-generation power plant located inside TGS’s General Cerri Complex. Commissioned in 2011, it consists of a 14 MW ST and sells electricity in the Energía Plus market. From 2012 to 2023, its historical average annual generation was 89 GWh, with a generation record high of 108 GWh in 2018 and a record low of 68 GWh in 2023.

Other two CTs in the Province of Buenos Aires are located in Greater Buenos Aires: CTGEBA, in the district of Marcos Paz, strategically located 1 km from the Ezeiza transforming station, a WEM key node for the supply of electricity to the country’s highest demand area. CTGEBA began operating in 1999 and has two CCGTs. The first one, with a 684 MW capacity, consists of two 223 MW GTs each and a 239 MW ST, repowered in October 2020. The second CCGT consists of a 182 MW GT, known as Genelba Plus, installed in 2009 and repowered in June 2019, another 188 MW GT was installed in 2019, and the 199 MW ST was commissioned on July 2, 2020, completing the expansion project started in 2017. CTGEBA is one of the largest CTs in the country, with a total installed capacity of 1,253 MW, representing 2.9% of Argentina’s installed capacity. From 2000 to 2023, its historical average annual generation was 5,294 GWh, with a generation record high of 8,594 GWh in 2021 and a record low of 3,438 GWh in 2001.

Furthermore, CTPP is located in Northern Greater Buenos Aires, in the Pilar Industrial Complex, district of Pilar. The CT consists of 6 Wärtsilä engines with a 43% efficiency. It has a total 100 MW capacity and may indistinctly consume FO stored in its own tanks or natural gas supplied through a dedicated gas pipeline connected with TGN’s main gas pipeline. The energy is evacuated through a 132 kV line connected to the Pilar substation. From 2018 to 2023, its historical average annual generation was 241 GWh, with a generation record high of 321 GWh in 2022 and a record low of 168 GWh in 2019.

Finally, CTEB is the sixth CT in the Province of Buenos Aires, located in Ensenada city, Greater La Plata. It consists of two Siemens GTs, 285 MW and 284 MW each, commissioned in 2012 and repowered in 2023, and a Siemens 279 MW ST commissioned on February 22, 2023, for the closing to CCGT, reaching a total 848 MW capacity, representing 1.9% of Argentina’s total installed capacity. This CT may consume natural gas or GO and has two storage tanks with a combined capacity of 45,000 m3. From 2013 to 2023, its historical average annual generation was 1,525 GWh, with a generation record high of 4,236 GWh in 2023 and a record low of 255 GWh in 2020. Currently, Pampa operates CTEB under a shared operation scheme with YPF Luz, and we hold a 50% stake in the capital stock of CTBSA, a company whose only asset is CTEB.

Current expansions

Note: As of December 31, 2023. 1 Without value-added tax. 2 Operated by Pampa (50% equity stake). 3 Gradual commissioning: 18 MW (Dec-22), 18 MW (Feb-23), 9 MW (Apr-23), 9 MW (May-23) and 27 MW (Jun-23). 4 Estimated averages. 5 Planned commissioning: stage 1 (94.5 MW) in Q3 2024 and stage 2 (45 MW) in Q4 2024.

Pampa is one of Argentina's leading hydrocarbon E&P companies, and it is present in the country’s major natural gas and oil extraction basins.

In 2023, investments in this segment reached US$556 million, the highest amount ever disbursed in one business and our E&P history. This record represents a 72% increase compared to 2022, mainly driven by Vaca Muerta’s development, supported by growing commitments under Plan Gas.Ar and exports to Chile.

9 For further information, see section 4.1 of this Annual Report.

Pampa’s exploration and exploitation areas

Production

Our E&P segment’s production in Argentina reached an average of 65.4 kboe per day in 2023, 93% corresponding to gas and 7% to oil. Its monthly evolution is detailed below:

E&P segment’s production

In kboe/day

Natural gas Thanks to the implementation of Plan Gas.Ar, under which Pampa participated in all rounds for the Neuquina Basin, in 2023, Pampa’s net production rose again by 5% year-on-year and 29% since 2021, reaching an annual average of 10.3 million m3 per day and setting new record highs. This increase contrastswith the 0.8% decrease in the country’s domestic production for the same period. Gas has dominated hydrocarbon production, driven by the commitment obtained under Plan Gas. Ar’s round 4 and associated with filling the new GPNK infrastructure, which has been operational since August 2023. Pampa contributed 4.8 million m3 per day, equivalent to 44% of the total additional capacity.   with the 0.8% decrease in the country’s domestic production for the same period. Gas has dominated hydrocarbon production, driven by the commitment obtained under Plan Gas. Ar’s round 4 and associated with filling the new GPNK infrastructure, which has been operational since August 2023. Pampa contributed 4.8 million m3 per day, equivalent to 44% of the total additional capacity.

With the drilling of 41 wells and completing 35, a new maximum production peak of 16.4 million m3 per day was reached in August, far exceeding the 2022 record. Winter production was 12.2 million m3 per day (+14% compared to winter 2022). This significant increase was supported by the development of reserves in the Vaca Muerta formation, with an aggressive campaign of 23 producing wells and an increased evacuation capacity.

In our shale gas development, Pampa obtained 11 of the best 20 gas wells in the history of Vaca Muerta, with 9 from Sierra Chata and 2 from El Mangrullo. In Sierra Chata, we achieved a 242% year-on-year growth, reaching 2.3 million m3 per day thanks to the high productivity of its wells. However, production in the El Mangrullo block was impacted by low demand, mainly due to climatic factors, with a 15% year-on-year decrease. It is worth highlighting that this block represents 59% of total production and, in 2023, reached an average production of 6.1 million m3 per day, with a record high of 8.3 million m3/day in the winter of 2023.

Sierra Chata and El Mangrullo account for 81% of our total gas production. Both blocks are among the main gas producers in the Neuquina Basin, with areas of almost 200 km2 and 870 km2 each. Pampa operates and holds a 100% working interest in the El Mangrullo exploitation concession until 2053. In Sierra Chata, Pampa operates and holds a 45.55% interest in the exploitation concession until 2053.

In addition, Pampa participated and was awarded under Plan Gas.Ar’s round 5.2, corresponding to incremental volumes in the NOA for a maximum of 70.5 thousand m3 per day, effective from October 2023 to December 2028.

Oil

Oil production at our ownership reached 4.8 kbbl/day, 10% lower than in 2022, mainly evidenced in El Tordillo, Gobernador Ayala and Río Neuquén (-0.5 kbbl/day). In 2023, 8 oil wells were drilled, and 9 were completed.

Pampa managed to maintain its crude oil exporter role, representing 29% of sales, an increase against 21% registered in 2022. In 2023, 9 Medanito crude oil shipments were exported, totaling nearly 514 kbbl of oil, mainly destined to the United States and Colombia.

Acquisition of Rincón de Aranda and CENCH granting

On August 16, 2023, Pampa closed the agreement with Total Austral S.A. (Argentine branch) to acquire the additional 45% interest in the Rincón de Aranda block. As part of this agreement, Pampa transferred its 100% equity stake in Greenwind, whose only asset is PEMC.

Moreover, the enforcement authority granted Pampa an Unconventional Hydrocarbons Exploitation Concession (Concesión de Explotación No Convencional de Hidrocarburos, CENCH) for a term of 35 years, effective from August 16, 2023. With the award of the CENCH, a pilot plan was established that includes the completion of one previously drilled well, the drilling and completion of eight wells and the construction of other surface facilities for a total of US$161 million over 4 years, with the possibility of a one-year extension to fulfill the commitment.

The pilot plan will begin in 2024 and is estimated to reach a plateau of 15 to 20 kbbl per day by 2027-2028.

Gas exports

During 2023, Pampa was a leading exporter to Chile and had permits in place to export gas on a firm basis for the following maximum volumes:

Moreover, Pampa holds permits to export to Chile and Brazil on an interruptible basis.

Exploration activities

In December 2023, the drilling of an exploratory well began in the Río Neuquén block, on the Río Negro Province side.

In addition, a note was sent to the Province of Mendoza expressing the intention to relinquish the Río Atuel exploratory block. The response from the province is still pending.

Agreement for continuity at Parva Negra Este

In December 2023, the agreement with the province for the contractual continuity in Parva Negra Este was ratified. This agreement contemplates relinquishing 50% of the surface (west sector), granting a lot under evaluation for 3 years until April 2025, and the commitment to drill a horizontal well targeting Vaca Muerta before September 2024.

ExxonMobil Exploration Argentina S.A. waived its stake as part of the agreement, assigning it at no cost to Pampa. As a result, Pampa holds 85%, and GyP owns the remaining 15%.

Aguaragüe license extension

In August 2023, an agreement was entered with the enforcement authority to extend the Aguaragüe concession for an additional 10-year term. The deal includes investment commitments for executing one well, two workovers and 2D seismic reprocessing (Executive Order No. 543/23). Pampa has a 15% stake in the block.

New exploration permit at Las Tacanas Norte

In November 2023, the contract for the exploration, development and production of the Las Tacanas Norte block executed between Pampa and GyP was approved (Executive Order No. 2426/23). Pampa holds a 90% interest for a 4-year exploratory period under its own operation and with the commitment to carry out several exploration tasks for hydrocarbon potential, including a vertical exploratory well, scheduled for the first quarter of the third year of the exploratory period.

Reserves

Pampa makes annual estimates of its reserves, which the Company’s geologists and engineers conduct. These estimates evaluate the recoverable hydrocarbon volumes from a specific date based on the quality of the available information and the involved professionals’ interpretation. It is worth highlighting that reserve estimates and future production forecasts may vary from final recovered quantities, depending mainly on the underlying assumptions.

These reserve estimates are evaluated and reported according to the SEC's Modernization of Oil and Gas Reporting Presentation rules. Gaffney Cline & Associates, international technical consultants, independently assessed our reserves, auditing 99% of Pampa’s estimated proven reserves (P1), and concluded that oil and natural gas reserve volumes are reasonable.

On December 31, 2023, Pampa’s P1 reserves amounted to 199 million boe, 11% higher than volumes recorded on the same date in 2022. Considering production levels and the 2023 incorporations, the reserve-replacement ratio was 1.8, and the average life obtained was approximately 8.6 years. In this period, 94% of P1 reserves correspond to natural gas and 6% to oil. It is worth noting that 42% of P1 reserves come from shale formations, mainly in El Mangrullo and Sierra Chata, against 24% in 2022.

Estimated reserves in Argentina are submitted before the payment of royalties since they are treated as operating costs due to their similarity to taxes on production. The composition and evolution of Pampa’s proven reserves as of December 31, 2023, both developed and undeveloped, are detailed below:

Hydrocarbon transportation10

OldelVal

As of December 31, 2023, Pampa holds a 2.1% direct interest in OldelVal, a company engaged in the exploitation of main oil pipelines providing access to Allen, in the Comahue area, and the Allen - Puerto Rosales oil pipeline, facilitating the evacuation of the oil produced in the Neuquina Basin to Puerto Rosales (a port in the City of Bahía Blanca) and supplying the Plaza Huincul and Luján de Cuyo distilleries in its route.

In 2023, the total transported volume was 55,021 m3 per day, equivalent to 126.3 million bbl, experiencing a 15.6% increase vs. 2022. Oil transportation from Allen to Puerto Rosales reached 44,146 m3 per day on average, whereas that for the refineries located in the provinces of Neuquén and Mendoza averaged 2,898 m3 and 7,978 m3 per day, respectively. It is worth highlighting that, as of the closing of 2023, this section’s transportation capacity was 34,560 m3 per day without friction-reducing agents and 48,000 m3 per day with friction-reducing agents.

Because of the production growth in the Neuquina Basin, OldelVal implemented the Duplicar expansion project, consisting of 525 km of pipelines throughout three provinces: Río Negro, La Pampa and Buenos Aires, besides a new terminal station in Puerto Rosales. The project’s investment is estimated at US$1,184 million, with a 28-month execution term. Financing comes from the local capital market and disbursements by shippers as per contracts executed between Oldelval and producers under the Ship or Pay modality for the new capacity available from December 2022.

Finally, on October 1, 2023, Duplicar Project’s first expansion stage was commissioned, allocating firm capacity to producers that hired additional transportation capacity for 12,000 m3 per day.

10 For further information, see Regulations on oil transportation in section 5.2 of this Annual Report.

OCP

As of December 31, 2023, Pampa held a 31.08% indirect interest in OCP, a company engaged in the transportation, storage and dispatch of crude oil through an oil pipeline in Ecuador with a capacity of 450 thousand barrels per day.

On January 16, 2024, Pampa acquired Repsol’s 29.66% stake in OCP through its subsidiary Pampa Energía Bolivia. With this transaction, Pampa reached a 63.74% stake in OCP’s share capital but maintained the company’s co-control.

The petrochemicals segment is vertically integrated into our gas operations, seeking to maintain its position in the styrene market and maximize its production value chain. Our assets cover a wide range of products, including octane bases for gasoline, benzene, aromatic solvents, hexane and other hydrogenated paraffinic solvents, propellants for the cosmetic industry, monomer styrene, rubber and polystyrene for domestic and foreign markets.

The petrochemicals market where Pampa competes is influenced by global supply and demand, which substantially impacts our results. Pampa is the only Argentine producer of monomer styrene, polystyrene and elastomers, and it is the only integrated manufacturer of goods ranging from oil and natural gas to plastics. As part of the effort to integrate operations, we use an important volume of our benzene production to obtain styrene and, in turn, a substantial volume of styrene to manufacture polystyrene and SBR.

The petrochemicals division operates the PGSM integrated petrochemical complex in the Province of Santa Fe, with an annual production capacity of 50 kton of gases (LPG used as raw material and propellant), 155 kton of aromatics, 290 kton of gasoline and refined products, 160 kton of styrene, 55 kton of SBR, 180 kton of ethylbenzene and 31 kton of ethylene. This business also includes a polystyrene plant in Zárate, Province of Buenos Aires, with a production capacity of 65 kton. As of December 31, 2023, Pampa’s estimated share in the Argentine styrene, polystyrene, and SBR markets amounted to 100%, 96%, and 91%, respectively.

It is worth highlighting that exports in this business are subject to an export duty which, under DNU No. 1060/20, is 4.5% as of 2021 for most products (styrene, polystyrene, SBR and toluene), whereas for others such as naphtha, aromatics and solvents, export duties remain at 8% as per DNU No. 488/20.

Styrene’s division

In 2023, the monomer styrene sales volume totaled 47 kton, which aligns with 2022. Propylene sales volumes increased by 12%, reaching 9 kton. Besides, polystyrene sales recorded a 3% decrease vs. 2022, reaching 56 kton, due to decreases of 2% in domestic and 10% in export sales. Finally, in 2023, Pampa sold a total of 43 kton of SBR, a figure 6% lower than in 2022, explained by an 11% decrease in exports, mainly to Brazil, offset by a 6% increase in domestic sales. However, there was an increase in exports to the United States and Chile.

Gasoline reforming division

In 2023, Reforming sales fell by 5% compared to 2022 due to decreases of 18% in octane bases, 28% in solvents and aromatics and 13% in propellant volumes. These decreases were partially offset by a 29% increase in gasoline sales. It is worth highlighting that in 2022, 16 kton of bases and naphtha were dispatched as toll processing, not recorded as volume sold.

The annual scheduled plant shutdown took place in November 2023, preventing the processing of the total raw gasoline volume received during the last months of the year.

Transener11

Transener is the leading company in Argentina’s utility service of high voltage electric energy transmission. It holds a concession over 15,409 km of transmission lines and 60 transforming stations, directly operating 86% of the country’s high-voltage lines. In turn, its controlled subsidiary Transba oversees the concession of 6,982 km of transmission lines and 112 transforming stations, making up the Main Distribution Transmission System of the Province of Buenos Aires. As of December 31, 2023, Pampa holds a 26.3% stake.

Note: *Annual FS figures under IFRS, in million AR$, adjusted by inflation as of December 31, 2022 and 2023, and later restated at each period’s closing FX.

11 For further information, see section 4.2 of this Annual Report.

Operation and maintenance

The extra high voltage power transmission grid, operated and maintained by Transener, faces considerable yearly demands. A new record-breaking demand for power capacity was set on March 13, 2023, reaching 29,105 MW, 3% higher than the maximum peak recorded in 2022.

Despite the burdens placed on the grid, service quality has remained within acceptable standards for a company like Transener. At the end of 2023, 0.34 failures per each 100 km line were recorded, consistent with international parameters accepted for companies operating and maintaining extra high voltage transmission systems.

Failure rate

Rate per each 100 km of lines

Business development

Electricity transmission system’s expansion plan

On June 9, 2023, the SE approved the high voltage transmission system’s expansion plan and the enhancement of existing transforming stations to strengthen the electricity transmission system, avoid restrictions on demand, optimize generation dispatches and guarantee a greater presence of renewable sources in the energy matrix (SE Res. No. 507/23).

The plan seeks to increase the country’s high voltage lines by 4,720 km and the transformation capacity by 13,770 MVA, with a total investment estimated at almost US$5 billion. Works were classified into 3 priority levels, the most critical area being the AMBA, together with the Charlone-Plomer corridor and the strengthening of the Puerto Madryn - Choele Choel - Bahía Blanca Patagonian corridor. The first stage seeks to provide 2,200 MW of renewable generation. The second stage includes the Rodeo-Chaparro-La Rioja, Río Diamante-Charlone lines, the second Patagonian corridor from the Province of Santa Cruz, and the addition of transformation capacity in the country's northeastern area. The last stage of the plan would add more lines in central and northern Argentina, as well as transforming stations.

Engineering services, works and maintenance

Transener focuses on projects leveraging its competitive advantages, prioritizing interventions in 500 kV and 132 kV systems. During 2023, progress was made in renewable energy projects, focusing on additional services such as installing production and demand monitoring systems. In addition, engineering counseling was provided for transforming stations in new wind farms.

Since its inception, Transener has been committed to operating, maintaining and providing specialized electricity transmission services to private customers, either for exclusive use or linked to public utilities, as independent transporters. Tasks performed include the replacement of transformers and bushings, oil analyses, specialized diagnostics, fiber optic repair, electric and magnetic field measurements, implementation of automated systems and maintenance of both lines and transforming stations, among other services.

It is important to highlight that Transener has maintained a fair and transparent remuneration policy in all contractual agreements, most of which have been continuously renewed since their commencement, thus reflecting the quality of the service provided and its customers’ high satisfaction level.

Communications

In 2023, Transener continued offering specialized infrastructure services to several communication companies, including assigning dark fiber optics over its system and renting space in microwave stations and their antenna-supporting structures. The growing demand for these services was replicated in revenues, driven by the volume of services provided and commercial conditions. Besides, Transener continues to provide specialized support services for WEM agents’ operational communications and data transmission.

TGS12

TGS is the country’s most important gas transportation company and operates the largest pipeline system in Latin America. It is also a leading company in producing and commercializing NGL for domestic and export markets, conducting this business from the General Cerri Complex located in Bahía Blanca, Province of Buenos Aires. TGS provides comprehensive solutions for natural gas and telecommunications, through its controlled company, Telcosur. As of December 31, 2023, Pampa holds a 26.5% interest in TGS.

12 For further information, see section 5.2 of this Annual Report.

Note: *Annual FS figures under IFRS, in million AR$, adjusted by inflation as of December 31, 2022 and 2023, and later restated at each period’s closing FX.

Description of business segments

Regulated segment: gas transportation

Revenues generated by this segment result mainly from firm natural gas transportation agreements whereby the gas pipeline capacity is reserved and paid for irrespective of its actual use. Besides, TGS provides interruptible services, where gas transportation is subject to the gas pipeline’s available capacity. Moreover, TGS provides operation and maintenance services for assets allocated to the natural gas transportation service for the expansions fostered by the Federal Government and held under trusts created to such effects. For this service, TGS receives the CAU, which is set by ENARGAS.

In constant terms, as of December 31, 2023, annual revenues generated by this segment amounted to AR$99,052 million in 2023, representing 22% of TGS’s total revenues. These revenues evidence a 22% decrease compared to 2022, mainly explained by tariff updates lagging behind inflation, producing a significant negative impact on the segment. It is worth recalling that in 2023, transportation contracts on a firm basis account for 81% of revenues from sales in this segment (vs. 84% in 2022). As of December 31, 2023, the total capacity hired on a firm basis amounted to 83.1 million m3 per day, with an approximate weighted average life of 10.5 years. In 2023, natural gas average daily injection into the system operated by TGS amounted to 73.4 million m3/ per day, +2% vs. 2022. This injection includes contributions from the Austral, Golfo San Jorge and Neuquina Basins, and gas entering the GPNK in Salliqueló.

In 2023, 184 new contracts were executed, 67 for interruptible transportation services and 117 for exchange and displacement services.

Non-regulated segment: production and commercialization of natural gas liquids

Unlike gas transportation, liquids production and commercialization are not regulated by ENARGAS. In 2023, revenues from this segment amounted to AR$265,413 million, 18% lower in real terms than those recorded in 2022. The decrease is mainly due to the fall in international reference prices and the negative variation in the real FX rate. Improved ethane prices partially offset these effects.

Liquids production and commercialization activities are carried out at the Cerri Complex, located close to the City of Bahía Blanca and supplied by all TGS’s main gas pipelines. Ethane, propane, butane and natural gasoline are recovered at this complex. TGS sells liquids in both domestic and foreign markets. In the domestic market, propane and butane are sold to reseller companies. These products and natural gasoline are sold at international reference prices in the foreign market. Moreover, ethane is sold to Polisur at a price agreed between the parties.

Regarding the domestic market, in 2023, TGS continued participating in the Household Gas Bottles’ Program and the Propane for Grids Agreement with regulated prices. By participating in these programs, TGS is forced to sell at prices ostensibly lower than market prices, and the Federal Government is required to reimburse TGS an AR$-denominated economic compensation, which is currently being collected with delays. Outside these programs, TGS sold 158,794 ton of propane and 1,290 ton of butane, mainly to the reseller market and, to a lower extent, to the industrial, propellant and automotive markets.

Moreover, in 2023, TGS continued selling ethane under the long-term agreement executed with Polisur in September 2018. Trade patterns were modified in 2020, with improvements in the ToP clause (to be met annually), guaranteeing TGS a gradual increase in sales volumes over the first five years of the contract. In 2023, the volume of ethane sold to Polisur experienced a rise, totaling 394,370 ton (vs. 329,232 ton in 2022).

In 2023, LPG continued being sold by land, with the dispatch of 379,544 ton of own product, compared to 390,914 ton in 2022. Faced with the impossibility of using its dock, in May 2021, a contract was signed with Compañía Mega S.A. to provide LPG tanker loading dispatch services, effective until December 2023.

As for gas arriving at the Cerri Complex for processing, a slight increase was recorded, accounted for by higher quantities from the Neuquina Basin, offset by the decrease in gas from the Austral Basin. In line with this, US$-denominated natural gas prices decreased by 7% vs. 2022.

Non-regulated segment: midstream

The midstream segment is not subject to ENARGAS regulation. In this segment, TGS provides services mainly including treatment, impurity separation and gas compression, gas extraction and transportation in fields, construction, inspection and maintenance of compression plants and gas pipelines, and steam generation services to produce electricity. This segment also includes revenues from telecommunication services provided through the subsidiary Telcosur.

This segment represented 20% of TGS’s total 2023 revenues, experiencing a 44% increase in real terms vs. 2022, mainly due to natural gas transportation and conditioning services at Vaca Muerta. These effects were partially offset by the impact of the restatement of inflation-adjusted revenues at the end of 2023, which evolution was higher than the AR$ devaluation.

The infrastructure for midstream services is supported by the gathering gas pipeline in the Vaca Muerta formation, with a transportation capacity of 60 million m3 per day and a treatment plant in Tratayén. In August 2023, TGS completed the 32-km expansion works in the northern section of the gathering pipeline, crossing the Los Toldos I Sur - El Trapial blocks, demanding an approximate US$60 million investment. Thus, by the end of 2023, the gathering pipeline will reach a total length of 182 km. During the first half of 2023, TGS completed the works for the installation of two modular gas conditioning plants using Joule-Thomson technology. Each plant has a 3.5 million m3 per day natural gas capacity, and a gasoline stabilizer tower was incorporated at the Tratayén plant. With a US$22 million investment, the current natural gas treatment capacity amounts to 14.8 million m3 per day.

In addition, TGS began works to install two conditioning plants, each with a capacity of 6.6 million m3 per day, which will require a total estimated US$320 million investment. The plants are expected to be operational in Q3 24. These projects will expand service capacity in the Vaca Muerta System, improving TGS’s return on investment and guaranteeing the evacuation of producers’ gas volumes. These modules are convertible to processing with low additional investment, scaling up the processing business in the Neuquina Basin.

Finally, regarding telecommunication services, in 2023, Telcosur signed new agreements that allowed for increasing sales capacity and strengthening TGS’s operations.

Enecor

Pampa holds a 70% interest in Enecor, an independent power transmission company, under a 95-year concession expiring in 2088. Enecor subcontracts the services of Transener, which operates and maintains 21 km of 132 kV double-triad lines from the Paso de la Patria transforming station in the Province of Corrientes.

The following chart shows the price evolution on ByMA (per share and Pampa’s traded volume) from January 2014 to December 31, 2023:

The following chart shows the price evolution per ADS and Pampa’s traded volume on the NYSE from January 2014 to December 31, 2023:

As of December 31, 2023, Pampa’s financial debt at the consolidated level under IFRS amounted to US$1,448 million, representing a US$165 million decrease vs. the closing of 2022. Net debt decreased to US$613 million, reflecting a 33% drop vs. the closing of 2022, mainly due to higher liquidity.

The total US$-denominated debt accounted for 88% of the Company’s gross debt. 79% of the total was denominated in US$, with an average 8.4% interest rate, primarily at a fixed rate, while the US$-MEP indebtedness rate was 5%. On the other hand, US$-link debt accounted for 7% of the gross debt with no coupon, and the average interest rate for AR$ debt was 95.7%. Pampa’s consolidated financial debt averaged 3.2 years.

The following chart shows the Restricted Group’s principal maturity profile, net of repurchases, in million US$ by the end of fiscal year 2023:

In 2023, Pampa significantly improved its maturity profile, mainly due to debt payment and redemption. Also, in 2023, Pampa was actively engaged in debt markets, issuing the following instruments:

Note: 1 Series 15 consisted of two issuances: AR$10,379 million (January 11) and AR$7,885 (March 6). 2 Series 13, initially issued in December 2022, was reopened. 3 Partially paid with AR$852 million from the first Green Bond (Series 8 CB). On February 5, 2024, all Series 17 CB were early redeemed.

The second Green Bond (Series 17 CB) was issued to finance PEPE VI’s expansion, supporting Pampa’s commitment to environmentally sustainable projects and the country’s energy matrix diversification. This instrument received the maximum Green Bond rating BV1 from Fix Ratings, an affiliate of Fitch Ratings, in alignment with the International Capital Market Association (ICMA)’s Green Bond Principles (GBP), and joined ByMA’s Social, Green and Sustainable Bonds, which promotes capital markets’ participation in the country’s sustainability.

On June 8, 2023, Pampa redeemed the outstanding 2023 CB, originally maturing on July 21, 2023, for US$92.9 million at a fixed 7.375% rate. Pampa also paid the first Series 8 Green Bond at maturity for AR$2,282 million and early redeemed Series 11 CB, originally maturing on January 15, 2024, for AR$21,654 million.

In addition, in 2023, net import financing was taken for the equivalent of US$11 million, as well as short-term loans in the local market for AR$16,535 million. Borrowings for US$8 million were paid on the FINNVERA loan. Finally, in August 2023, Greenwind’s debt was deconsolidated following the swap with Total Austral S.A. (Argentine branch).

Regarding affiliates, in 2023, CTBSA issued the US$-linked Series 9 CB, maturing in April 2026, for US$50 million at a 0% nominal annual rate, early redeemed Series 1 CB for US$32 million and paid at maturity Series 7 CB for AR$1,753 million. Transener repaid loans at maturity for AR$333 million, and TGS took net financing for the equivalent of US$60 million.

After the closing of fiscal year 2023, it is worth highlighting the early redemption of Series 17 CB (Green Bond) issued by Pampa for AR$5,980 million and originally maturing on May 4, 2024, and the issuance of Series 19 CB for AR$17,131 million at a Private Badlar rate minus 1%, maturing on February 28, 2025. Moreover, Pampa took net import financing for US$1 million and paid net short-term bank debt for AR$100 million. CTBSA early redeemed Series 2 CB, originally maturing on June 4, 2024, for AR$31,760 million and took short-term bank debt for AR$31,786 million.

As of this Annual Report’s issuance date, the Company and its subsidiaries comply with the covenants established in their debt agreements.

Pampa Group’s credit rating

Note: 1 Stand-alone rating. 2 Local ratings issued by FIX SCR.

From Pampa’s Human Resources team, we seek to contribute by adding value through proximity to operations and businesses. Guided by our values, we focus on enhancing talent attraction and development by promoting our culture, a positive work environment and 360° communication. We also strive for process efficiency and continuous improvement, relying on digitalization for a simpler and swifter employer experience.

To cover vacant positions in our assets and corporate areas, we look for dynamic profiles reflecting our teamwork culture, as well as the search for excellence, adaptability, and commitment. In 2023, we continued communicating our searches through social networks, improving applicants’ flow and the employer brand to attract talent. We also prioritized internal development, covering 21% of total searches through internal staff movements.

Finally, in 2023, we performed the fourth edition of Pampa’s Young Talent, incorporating 15 young professionals into our businesses, including 5 women and 2 males who had been interns in the Pampa Foundation’s scholarship.

In 2023, we offered opportunities to students from different courses of study through our internship program, incorporating young profiles in different Company areas: Petrochemicals, E&P, Power Generation, Human Resources and Investor Relations. Out of 15 interns, 6 joined the Company to cover vacant positions.

Our human capital management processes, policies and practices are geared at developing individual and team talent to maximize organizational skills. We believe in leadership as the cornerstone to promote a collaborative work culture, with a constant search for opportunities and challenges to enhance businesses and achieve established goals.

In 2023, we held the annual meeting of human resources leaders from the Company’s assets to review the management strategy and define the year’s priorities.

Our compensation policy is based on ensuring external competitiveness and maintaining in-house equality. We perform permanent monitoring with market surveys to adjust our compensation and wage structure for non-unionized employees.

We are in permanent contact with unions from the different industry branches where we operate. Over time, we have succeeded in developing bonds based on permanent dialog, noted for respect and transparency, laying the foundation to build foreseeable and long-standing relationships, thus favoring the pursuit of common interests.

During 2023, we conducted multiple labor negotiations accompanying inflation indexes to restore the purchasing power of salaries more frequently than in previous years and, consequently, for shorter periods. Labor negotiations with different unions representing our workers have been conducted at the company, regional, and/or activity levels through the different chambers.

Likewise, we actively participate in the business chambers associated with our activities and in negotiating committees. As for our subsidiaries, we have permanently monitored the evolution of relationships with unions and the development of wage and conventional negotiations.

We continued seeking technological tools for process digitalization and optimization, prompt access to information and enhanced management control. In 2023, we implemented a platform to manage the staff incorporation process, thus standardizing work elements’ requests in case of employee registrations, transfers or terminations. In addition, all active employee files were digitalized, and payroll settlement was outsourced from January 2024.

To support our teammates’ development, in 2023 we continued investing mainly in training through hybrid programs (on-site and/or virtual):

Pampa’s culture is based on an integrated, professional and agile model articulating diversity and integrating our values, practices and objectives. In 2023, we promoted proximity with our teammates through experience design, communication, well-being and recognition. The main initiatives conducted were the following:

Social investment is part of a strategic model for building relationships with our stakeholders, led jointly with the Pampa Foundation. With a solid commitment to society, we implement programs and actions geared at improving individuals’ quality of life, strengthening education and enhancing the capabilities of the institutions in the communities where we operate.

To support community development and set clear, measurable and assessable goals and interventions, we have framed our social investment strategy on three axes:

We are committed to managing our businesses’ economic, social and environmental impacts. Through our social investment and our teammates’ volunteering actions, we intend to contribute to the SDG, especially SDG 4 (quality education), SDG 7 (affordable and clean energy), SDG 8 (decent work and economic growth) and SDG 12 (responsible consumption and production). We rely on the background and relevance of social organizations and public bodies; therefore, we have partnered with them to develop our social investment initiatives. SDG 17 (partnerships for the goals) crosscuts all our initiatives, using our complete knowledge towards an equitable and committed society.

In 2023, we received ACDE’s highest recognition for our Professionalizing Practices, which have benefited more than 2,000 young people since 2017. We were included in the ranking of Companies Committed to Youth 2023, conducted by the International Youth Organization for Ibero-America (Organismo Internacional de Juventud para Iberoamérica, OIJ) and the International Organization of Human Capital Managers (Organización Internacional de Directivos de Capital Humano, DCH). We were also recognized by CEADS in the Connecting Companies with the SDG program, aligned with SDG 4, 7, 12 and 17, and by the Ecumenical Social Forum with the Solidarity Entrepreneur distinction. The Ministry of Human Development and Habitat of the City of Buenos Aires awarded us the Social Impact seal for our contribution to the social economy, and the Provincial Department of Community Relations of Buenos Aires has recognized us as a Socially Committed Company.

We believe education plays a key role in development and social and labor market inclusion, strengthening knowledge to expand horizons. Therefore, we seek equal opportunities for children and young people in vulnerable situations.

Accompaniment in educational paths

At Pampa, we support the completion of technical secondary education and ease teenagers’ transition into university and college in the Provinces of Neuquén, Salta, Mendoza, Buenos Aires and Santa Fe. Our scholarship grantees receive financial support, accompaniment, training and educational outings, and the possibility to explore formal work environments, providing them with a sharp vision of future career opportunities.

In 2023, we accompanied 1,291 students, including 990 students in the last three years of technical secondary schools and 301 university and college students. As of December 2023, 296 high school and 35 university students from courses associated with our businesses, mainly engineering, had graduated from the program. Moreover, together with IAPG, we invited 24 university grantees and 627 technical school students to participate in the Argentina Oil & Gas (AOG) exhibition in Buenos Aires and get a close look at the oil and gas industry.

At Pampa, we believe that the students’ educational paths should be designed keeping their environment in mind. In 2023, we provided tools to 817 teachers and school authorities, who implemented their learnings with more than 20,000 students. Besides, we continued strengthening the Pampa Foundation’s Schools Network, with the participation of 17 technical schools and 146 educators. We held three teacher training events open to the public, where more than 310 people participated live in the ‘Expansive Wave’ dialogs facilitated by education leaders such as Lila Pinto and Rebeca Anijovich, among other distinguished speakers.

In 2023, we provided tools to 817 teachers and school authorities, who implemented their learnings with more than 20,000 students. We conducted three editions of ‘Energy Researchers’ in Neuquén and Salta and 2 masterclasses in Mendoza; this initiative seeks to develop the scientific spirit. We offered 6 courses on energy efficiency, green hydrogen and renewable energies to 124 teachers from 34 technical schools in Mendoza, Buenos Aires and Neuquén. In collaboration with the National Technological University (UTN) Buenos Aires, we conducted ‘Rocket to the Moon,’ a training course that provides tools for teaching science, technology, engineering and mathematics (known as STEM) with the participation of 16 teachers and 95 students from 4 technical schools in our Network.

As part of our commitment to improving educational institutions, we contributed AR$83 million to equip and refurbish schools, universities and training centers of the communities where we operate.

Labor placement training

At Pampa, we conduct professionalizing practices, first-job workshops and training spaces for secondary, college and university students. Their goal is to consolidate, integrate, and expand knowledge and capabilities that match the students’ training profile, thus promoting their employability. In 2023, we offered different experiences to more than 1,400 young students.

Thanks to internal internships and partnerships with other entities, we continued fostering more than 500 professionalizing practices for students in the last years of technical schools. We developed the program in all of Pampa’s assets for 181 students from 19 technical schools, totaling 18,905 theoretical and practical training hours. We also allied with Siemens Foundation, Plaquipi and 500RPM to bring professionalizing practices in renewable energy to more than 250 students. At the Pampa Building, we conducted World of Work Approach Activities for 52 high-school students who performed an average of 50 hours of practice and training in the Company.

Together with the Neuquén’s Ministry of Government and Education and in partnership with other companies, we have organized employability workshops for the second consecutive year. More than 500 5th and 6th-year students at secondary technical schools in the City of Neuquén, Plottier and Centenario have attended these workshops. We held the Employability Meeting with the AcercaRSE group for 318 students from technical schools in Zárate, Campana and Lima. We also offered a resumé preparation and employability workshop for 94 students in Marcos Paz. Finally, at the university and college levels, we facilitated 200-hour supervised professional practices and internships for 6 scholarship grantees from universities and colleges in Salta.

Strategic alliances for community development

We understand that Pampa’s relationship with its stakeholders comprises all aspects of our business. That is why, in 2023, we continued implementing 29 action plans, launched in 2022, geared toward the community, suppliers and local governments. We also conducted seven workshops with more than 60 leaders. At the national level, we participated in working groups and contributed funds to 10 alliances for sustainable development. The programs developed in 2023 are highlighted below.

Sustainable energy

As an energy-sector company, we develop social projects facilitating access to energy through renewable sources and energy efficiency optimization.

In the Province of Salta, we have been working with Fundación Solar Inti since 2017 in the self-construction of eco-stoves to develop autonomy and entrepreneurship among women from the Guaraní Aboriginal community of Piriquenda. In 2023, we monitored and maintained the 50 kitchens and stoves delivered in 2017 and added 10 new beneficiaries, expanding the social, environmental and economic impact to more than 300 people.

We also developed the Energy Efficiency program for 465 teachers and students from Buenos Aires and Neuquén technical schools. The participants received a certification as energy management technical assistants, expanding their professional placement possibilities. In 2023, thanks to the implementation of 27 projects, 63% annual energy savings were achieved at homes, avoiding the emission of 322 ton of CO2e per year. In schools, 10 experimental boards were delivered, and 159 energy efficiency actions were carried out.

In Coronel Rosales, we performed the maintenance of two devices installed in rural schools together with 22 students and 4 teachers from schools in Bahía Blanca and Monte Hermoso with an orientation on renewable energies. Also, together with teachers, students and volunteers, we maintained the wind turbine at Primary School No. 4 of Paraje La Colorada, Marcos Paz.

Skills training and support to productive undertakings

We continue fostering productive activities development and employment creation through courses on job skills for profiles associated with our business or in demand in the community and support effective undertakings generating social and/or environmental benefits.

In Buenos Aires, 100 persons from Bahía Blanca and Ingeniero White graduated from the 6 courses of the ‘Good Job’ program, aimed at improving employability for people out of work or without a formal occupation, mostly aged 18-45. In Neuquén, 24 people completed the auxiliary trade course on gas conditioning plants developed together with UTN Neuquén.

We completed the ‘Programming Inclusion’ course with the Formar Foundation and Digital House, with 25 young graduates as full-stack web programming specialists, improving their job prospects in a highly demanded area.

Moreover, we granted scholarships to 6 Baccigalupo Foundation students so that they may graduate as sports assistants, contributing to labor placement for people with disabilities. Since 2016, we have granted scholarships to 34 students. Moreover, we continued providing supplies to the Accervil Protected Workshop, where 40 workers with motor disabilities manufacture assorted products.

Besides, we continued with the ‘Responsible Inclusive Purchases’ program as part of the Company’s procurement procedure, providing equal opportunities to suppliers integrating social development variables into their local value chain. In 2023, we consolidated the program with internal areas of the Company and made 100 purchases from 38 social suppliers. We held 10 on-site and 10 virtual fairs in Salta, Mendoza, Santa Fe, Neuquén and Buenos Aires, involving 32 social undertakings.

Enhancement of local organizations

We assist in improving organizations’ institutional management by contributing and supporting projects.

In Salta, in partnership with Pata Pila, we conducted a baking course for 18 women and supported the Guaraní community of Piquirenda Viejo. Since 2021, we have been accompanying the community, strengthening the women’s network through workshops about a healthy community, gender perspective and rights, childhood, adolescence and families.

We are also founding partners of the Public-Private Lab. This initiative seeks to expedite collaboration between governments, the private sector and civil society to transform them into allies for development. The lab is currently developed in 13 cities, involving more than 184 players. Besides, in the City of Buenos Aires, we continued supporting the Social Economy Development Fund (Fondo de Desarrollo de Economía Social, FONDES) to boost private-sector investment toward financing productive units in low-income neighborhoods, social economy enterprises and cooperatives.

At Pampa, we are convinced that our teammates are our main asset and are responsible for creating shared value in and with the communities where we operate our assets. We currently have 10 active Volunteering Committees with 138 people. Committee members in each asset meet periodically to define activities and action plans in coordination with local strategic partners. In 2023, we provided training to 101 volunteers together with Creer Hacer, addressing topics such as leadership from a social service standpoint and new tools for designing community projects to strengthen and professionalize their roles. We fostered 30 actions with the participation of 1,870 volunteers who devoted more than 13,000 hours to humanitarian activities.

Professional volunteering

We encourage employees’ involvement and participation in activities, putting their specific skills and expertise into action to support causes, projects and organizations needing them through counseling, technical talks and technical-professional knowledge.

We continued our ‘Open Doors’ program, seeking to contribute to students’ training through knowledge of our production processes and facilities. In 2023, we conducted 49 visits to 9 assets for more than 1,200 students and teachers in Buenos Aires, Mendoza, Salta, Santa Fe and Neuquén. Besides, we performed three 360° virtual visits to the Bahía Blanca wind farms for more than 180 students and teachers.

Within the framework of the Activities introducing students to the world of work (ACAP), 44 volunteers from Pampa Building’s IT, health, social responsibility, general services and digital communication areas shared their knowledge and experience with 79 students, and 154 people shared their experience in the secondary and university practices conducted in our assets. Moreover, thanks to the coordination with the Renaciendo Civil Association from Zárate, we developed social and labor reintegration practices with 14 young participants.

In the Petrochemical Complex, we continued with Productive Chain visits, a program targeted at 7th-grade students to promote the recognition of regional productive sectors. We conducted 4 visits, during which volunteers received 82 students from 3 schools in the area.

Annual campaigns

In 2023, we performed 6 editions of the Blood Donation Drive in the City of Buenos Aires, Bahía Blanca, Salta and Neuquén, in partnership with local organizations encouraging voluntary blood donation, reaching 143 actual donations, with an impact on up to 572 lives.

Besides, we conducted ‘A Sound Beginning,’ a school supplies and toy drive for 520 children and youngsters. In the winter, we carried out again ‘Together Against Cold Weather’ in Salta, Neuquén, Buenos Aires, Santa Fe and Mendoza, where we held cooking workshops, made polar blankets and collected donations, benefiting 12 organizations that support 409 people in vulnerable situations.

We also celebrated Children’s Month by driving a recreational proposal for more than 200 children from Piedra del Águila and Paraje Naupa Huen, Neuquén. Our volunteers shared an afternoon with children from Casa de Abrigo in Zárate, painting flowerpots made by the Renaciendo Civil Association.

Finally, Pampa’s assets joined the annual Solidarity Christmas Eve campaign. In November and December, 367 teammates prepared 1,300 bags of food and gifts for families from more than 35 organizations in the communities where we operate.

Sessions and projects with a social and community impact

In General Güemes, we continued promoting awareness and training on autism spectrum disorders jointly with the Pedacito de Cielo Foundation. We performed 3 workshops together with volunteers and a subject-matter expert.

In 2023, a group of 8 knitters at the Pampa Building supported with their production three institutions assisting vulnerable children. The 144 knitted items (caps, jackets, blankets, etc.) were delivered to the Our Lady of Lourdes Home, the Donde Quiero Estar Foundation and the Oscar Alende Maternity and Children’s Hospital.

In addition, we accompanied the Sports and Values School in Bahía Blanca, which promotes inclusion through soccer and basketball practices, and we shared 2 sessions with the participation of 46 young people and adults with disabilities. Accompanying Christmas celebrations, together with Impulsa San Lorenzo of Santa Fe, we carried out a baking workshop that benefited more than 20 people from 2 homes.

In 2023, we focused on Cybersecurity, carrying out awareness programs and informative activities, such as Cybersecurity Week. We also incorporated it into the QHSE area’s Risk Management Matrix (RMM), strengthening a comprehensive approach to cybersecurity in all projects to manage associated risks. We worked closely with the power generation business to develop an evolved disaster recovery plan for the plant environments. We achieved greater IT/OT synergy and improved on-site information’s integrated security.

We executed the blueprint for SAP S4/HANA Implementation. We performed a detailed analysis of the affected management processes and the necessary technological assessment, constituting the kick-off for migration in 2024. Expected benefits include simplification of processes and the application map, reduction of maintenance costs, improved user experience, and the basis to implement innovative solutions enabling the evolution of the working methodology throughout the company.

Regarding corporate areas, we implemented solutions for the Procurement and Corporate Services department, streamlining the evaluation of services and providing valuable information for future contracts. We also digitalized the fleet and real estate management processes. For the accounting area, we worked on solutions for FS to optimize quarterly and annual closing times. In Human Resources, we implemented the teammate onboarding application, file digitalization, and the payroll outsourcing project. Finally, we installed and configured the Salesforce solution for the Pampa Energía Foundation’s projects and internship management.

We implemented the Crude Oil Management System in the E&P business to facilitate more efficient integration of oil and gas commercialization activities. We optimized the Production Management System to streamline decision-making and improve the management of data audits and required legal aspects. We developed a real-time vehicle fleet monitoring solution using the fields’ georeferenced information. We improved the Drilling and Completion software for operational decision-making, enabling a thorough control of critical variables. We also strengthened asset integrity by strategically installing cameras, domes and access systems at El Mangrullo, ensuring effective operations and security monitoring.

We developed the Excellence Model for Digital Transformation Management in the Power Generation business, showcasing benefits and achievements at the National Quality Award. We continued collaborating for the Digital Development Center, ensuring the alignment and execution of prioritized initiatives with business challenges. We have evolved predictive models to identify malfunctions or possible machinery failures. We developed a new efficiency deviation monitoring model for CTGEBA’s combined cycles and a Control Loop Monitoring solution in CTEB, increasing the efficiency and reliability of the plant’s ecosystem. Finally, we implemented a man-down detection solution, enabling rapid assistance in case of incidents.

In the Petrochemicals business, we focused on maintaining reliability levels and goals. We updated PGSM’s variable historian and implemented a new rheometer measurement system at the laboratory. We incorporated bar-coding technologies into our products to improve traceability, increase operational efficiency and guarantee superior performance standards.

At Pampa, we are committed to developing our businesses with the highest quality, safety, environmental and labor health standards for personal welfare, environmental care and energy efficiency. We want to meet current needs without compromising future generations, pursuing sustainable development.

At the end of 2021, we evolved our QHSE Policy toward a new Integrated Management Policy, reinforcing the commitments to the health, well-being and safety of individuals, the environment and our stakeholders. Its scope incorporates the efficient use of energy and natural resources, the reliability and integrity of our facilities and operations, and our assets’ management optimization. The new policy reaffirms that integrated management is an essential part of our operations and includes ten management principles that guide its simple and agile implementation.

In 2023, Pampa continued moving forward with management programs in all its operations, training the staff under integrated management and strengthening Pampa’s culture in QHSE aspects.

We further our management quality using ISO standards and the Argentine National Quality Prize model, seeking continuous improvement. We apply methodologies such as the operational Risk Management Matrix (RMM), the QHSE performance cycle, certified management systems administration and daily management quality.

We apply the RMM to reduce the risks inherent in our operations. In 2023, we conducted the 2nd RMM cycle, assessing all our assets. After implementing the improvement plans resulting from the 1st assessment in 2020, we included new risks in this cycle, with more integrated and demanding criteria, achieving a 5% reduction in major risk detection. In the digital area, we obtained the National Quality Award in digital transformation management at our Power Generation business, a valuable recognition of leadership, management, and results in this field.

We achieved several of the QHSE goals set in 2023. We maintained ISO 9001 (Quality Management), 14001 (Environmental Management) and 45001 (Occupational Health and Safety) certifications in all businesses and ISO 55001 (Asset Management) in all power plants, and expanded ISO 50001 certification to CTPP, CPB and CTIW. In addition, we continued implementing improvements in QHSE applications, such as the Preventive Behavioral Observations and the Findings and Improvements system. We offered QHSE training courses via the Company’s digital training platform.

Finally, since 2013, outstanding improvement practices at Pampa have been selected to participate in the annual national meeting of the Argentine Society for Continuous Improvement (Sociedad Argentina Pro-Mejoramiento Continuo, SAMECO) to share our experiences and knowledge. In the 2023 28th annual meeting, we presented the work ‘DAP (Process Anomaly Detection) system implementation’ from CTGEBA.

In 2023, we continued developing initiatives to improve safety management and performance. We reinforced research training and improved applications such as SIHAM (Integrated Findings and Improvements System, used for preliminary anomaly reporting) and QHSE Alerts (for communicating lessons learned during accident investigation, turning them into preventive measures).

Besides, new strategic initiatives were continued and developed:

In industrial hygiene, we improved the chemical, physical and ergonomic risk maps submitted to the new ART. Besides, we continued with the Carcinogenic Substances and Compounds Surveillance System established by the Superintendence of Labor Risks.

At Pampa, we pursue sustainable development in line with the Principles of the United Nations Global Compact and have been signatories since 2019. We are committed to protecting the environment and endeavor to rationalize natural resources in each project by applying proper and economically viable technologies.

In 2023, we implemented the corporate Environmental Principles standard, reinforcing its application and dissemination through digital forms facilitating field observations. These forms are aligned with SDG 4, 6, 7, 8, 9, 12, 13 and 17. Moreover, we have participated in ‘Connecting Companies with the SDG’ for the fourth consecutive year. This program, organized by CEADS and EY Argentina, focuses on consolidating the role of companies in the 2030 Agenda. The most prominent initiatives we presented have contributed mainly to SDG 4: ‘Quality education’ and SDG 7: ‘Ensuring access to affordable, reliable, sustainable and modern energy,’ evidencing Pampa’s commitment to sustainable development.

Regarding our emissions and energy inventory, in 2023, we achieved external verification and worked on identifying actions and projects to reduce our footprint, such as the study to reduce CO2 emissions in venting and carbon capture in our fields. At PGSM, we continued the leak detection practice using infrared cameras, allowing quick scanning, maintenance action, and work environment optimization. We also collected travel information from our employees to begin calculating Scope 3 emissions. In 2023, we implemented the Eco Seals program at the Pampa Building. In 2024, we will attend the final audit conducted by the Government of the City of Buenos Aires’ Environmental Protection Agency. We have conducted training and updating sessions on climate change jointly with CIQYP: ‘The chemical industry and climate change in Argentina’ and ‘Sustainability in the petrochemicals business: climate change and carbon footprint,’ with more than 50 participants.

To improve water resource management, in 2023, we conducted a risk assessment in each of our operating sites.

In addition, in 2023, we participated in ECOVADIS, obtaining a silver medal for our performance, and received outstanding scores in CDP’s climate change and water security surveys.

At Pampa, we adopt preventive measures and prepare to respond promptly and effectively to emergencies. We perform periodic drills to promote established practices and incorporate improvements into the integrated management system.

In 2023, we completed an analysis to align all sites to the corporate contingency management standard. We also developed and published the corporate standard for rope rescue and operations.

Moreover, we completed the fire protection systems’ survey, ensuring their correct operation and response capacity. We implemented the Incidents Command System through theoretical and practical training and collaborated with local organizations in relationship-building and training activities.

At Pampa, we have a team of nurses, doctors, and nutritionists to prevent factors that affect health and safety at work and contribute to a healthy work environment (SDG 3).

During annual medical check-ups, we identify specific needs and design health programs according to the risk groups surveyed. We continued with the Policy on Alcohol, Drugs and Psychoactive Substances with a focus on safety through training and preventive health check-ups. In addition, more than 8,400 alcohol and psychoactive substances tests were performed.

We also continued offering training in Cardiopulmonary Resuscitation, first aid, physical activity and vaccination campaigns. We went on with the Cardioprotection program per international standards, being recertified as a Cardiac Protected Company. Moreover, talks on addictions, smoking cessation, depression, stress management, skin cancer prevention, childcare, healthy eating and heart care were organized with professionals. We carried out vaccination campaigns, nutrition proposals and bromatological audits.

Together with the Human Resources team, we reinforced SUMA Bienestar, a program centered on the teammates’ personal life and physical, emotional, labor and financial wellness. In collaboration with the Wellness Latina Group, we maintained the Employee Assistance Program for confidential professional counseling.

Pampa is a blood-donation-friendly company; therefore, together with the Pampa Foundation, it continued promoting on-site employee voluntary blood drives in 2023. In addition, we have a breastfeeding space at the Pampa Building.

Pampa, Argentina’s leading independent and energy-integrated company, focuses its business on the country’s electricity and gas value chains.

Through its activities, subsidiaries and stakes in joint businesses and associates, and based on the business nature, customer portfolio and risks involved, we have identified the following business segments:

Consolidated net sales revenues of US$1,732 in the fiscal year ended December 31, 2023, 5% lower than US$1,829 million in fiscal year 2022. The following decreases were recorded: 2% in power generation (US$15 million), 18% in petrochemicals (US$110 million) and 30% in holding and others (US$6 million), partially offset by higher oil and gas revenues (US$20 million) and lower intersegment eliminations (US$14 million).

Consolidated cost of sales of US$1,107 million for the fiscal year ended December 31, 2023, 3% lower than US$1,139 million for the fiscal year 2022. The following decreases were recorded: 4% in power generation (US$16 million), 17% in petrochemicals (US$92 million), and lower intersegment eliminations for US$14 million, partially offset by 18% increases in oil and gas (US$62 million).

Consolidated gross income of US$625 million for the fiscal year ended December 31, 2023, 9% lower than US$690 million recorded in fiscal year 2022. The following decreases were recorded: 14% in oil and gas (US$42 million), 22% in petrochemicals (US$18 million) and 30% in holding and others (US$6 million), partially offset by a slight US$1 million increase in power generation.

Consolidated operating profit of US$424 million for the fiscal year ended December 31, 2023, 33% lower compared to US$631 million for the fiscal year 2022. The following decreases were recorded: 19% in power generation (US$64 million), 28% in oil and gas (US$54 million), 13% in petrochemicals (US$7 million) and US$82 million in holding and others.

Net financial results represented a profit of US$199 million for the fiscal year ended December 31, 2023, against US$50 million losses in the fiscal year 2022, mainly explained by higher profits of US$172 million in power generation, US$9 million in petrochemicals and US$151 million in holding and others, partially offset by higher net losses for US$83 million in oil and gas.

Consolidated profit of US$305 million for the fiscal year ended December 31, 2023, US$302 million of which are attributable to the Company’s shareholders, 34% lower than the US$456 million consolidated profit attributable to the Company’s shareholders in fiscal year 2022, explained by reported reductions in oil and gas (US$92 million) and lower profits of 18% in power generation (US$46 million), 25% in petrochemicals (US$10 million), and 5% in holding and others (US$6 million).

Power generation segment

Sales from the power generation segment decreased by 2%, to US$648 million, in the fiscal year ended December 31, 2023, against US$663 million in the fiscal year ended December 31, 2022. This variation is mainly explained by (i) the devaluation of AR$-denominated spot energy prices, (ii) lower volumes and prices sold under Energía Plus, (iii) lower revenues from recognition of own fuel due to moderate temperatures and the favorable hydro and nuclear supply, which impacted on the thermal dispatch decrease; and (iv) certain unavailability, mainly resulting from an incident in CTLL’s GT05 and programmed overhauls. These effects were partially offset by the acquisition of VAR and the commissioning of PEPE IV.

During the fiscal year ended December 31, 2023, power generation experienced a 15% increase (+2,668 GWh) against the fiscal year ended December 31, 2022, explained by a higher dispatch at CTEB resulting from the closing to combined cycle13, hydro generation resulting from the increase in water inputs, and wind generation associated with VAR’s acquisition and PEPE IV’s commissioning. These effects were partially offset by a lower thermal units’ dispatch by CAMMESA.

13 Under IFRS, CTEB is an affiliate not consolidated into Pampa’s FS.

The following table shows the net generation for power generation plants:

Note: 1 PEMC has been consolidated into Pampa since August 12, 2022. 2 Operated by Pampa (50% of equity stake).

Cost of sales decreased by 4%, to US$354 million, in the fiscal year ended December 31, 2023, compared to US$370 million in the fiscal year ended December 31, 2022, mainly due to lower gas and energy consumption to cover contracts as a result of the lower thermal demand mentioned above, in addition to lower repair and maintenance expenses, offset by higher depreciation and labor costs.

Gross income from the power generation segment did not experience significant variations, recording a profit of US$294 million for the fiscal year ended December 31, 2023, against a profit of US$293 million for the fiscal year ended December 31, 2022. Moreover, in the fiscal year ended December 31, 2023, the gross margin on sales increased to 45%, compared to 44% recorded in the fiscal year ended December 31, 2022.

Power generation selling expenses decreased by 33%, disclosing US$2 million for the fiscal year ended December 31, 2023, against US$3 million for the fiscal year ended December 31, 2022.

Administrative expenses from the power generation segment increased by 28%, to US$50 million, for the fiscal year ended December 31, 2023, against US$39 million for the fiscal year ended December 31, 2022, mainly due to higher labor costs, which were higher than the AR$ devaluation and, to a lower extent, a slight increase in fees and compensation for services.

Other net operating income and expenses from the power generation segment increased by 140%, to US$48 million profits for the fiscal year ended December 31, 2023, compared to US$20 million profit for the fiscal year ended December 31, 2022, mainly due to higher commercial interest as a result of delayed collections from CAMMESA.

The power generation segment results from the participation in joint businesses recorded US$18 million losses in the fiscal year ended December 31, 2023, a US$83 million drop compared to US$65 million profits in the fiscal year ended December 31, 2022. This variation is mainly explained by lower results at CTEB during 2023 since the US$-denominated differential remuneration for CTEB’s CCGT could not offset financial losses and the higher income tax charge. Besides, in 2022, a US$23 million profit was recorded due to the acquisition of the additional 50% stake in Greenwind, reflecting the fair value of 50% of the previous stake.

Power generation operating income decreased by 19%, recording a US$272 million profit in the fiscal year ended December 31, 2023, compared to a US$336 million profit in the fiscal year ended December 31, 2022, mainly due to the loss generated by CTEB’s equity income, the profit recorded in 2022 for the acquisition of the additional 50% stake in Greenwind, and lower spot energy and recognized gas income. These effects were partially offset by higher commercial interest from delayed collections from CAMMESA, at an average rate and collection term of 62% and 69 days for 2022 and 113% and 83 days for 2023, respectively. The operating margin on sales for the fiscal year ended December 31, 2023, decreased to 42%, against 51% in the fiscal year ended December 31, 2022.

Power generation net financial results recorded a US$163 million profit for the fiscal year ended December 31, 2023, compared to a US$9 million loss for the fiscal year ended December 31, 2022, mainly due to higher profits from changes in the fair value of financial instruments, partially offset by higher financial interest on AR$-denominated debt and net FX losses resulting from the business’ active AR$ monetary position.

The power generation segment recorded an income tax charge of US$225 million for the fiscal year ended December 31, 2023, compared to US$73 million for the fiscal year ended December 31, 2022.

Power generation activities recorded a net profit of US$210 million for the fiscal year ended December 31, 2023, of which US$207 million are attributable to the Company’s shareholders, compared to US$254 million profits for the fiscal year ended December 31, 2022, of which US$253 million corresponded to the Company’s shareholders.

Oil and gas segment

Sales from the oil and gas segment reached US$666 million in the fiscal year ended December 31, 2023, representing a 3% increase compared to US$646 million in the fiscal year ended December 31, 2022. This variation is mainly explained by higher volumes delivered under Plan Gas.Ar due to the entry into effect of round 4.2 associated with the commissioning of the new GPNK and better gas prices for exports and local industries, offset by lower oil export prices and production volumes.

The average sales price for natural gas, including subsidies, was US$4.2/MBTU for the fiscal years ended December 31, 2023 and 2022. The average sales price for oil was US$66.2/bbl for the fiscal year ended December 31, 2023, 5% lower than US$69.6/bbl for the fiscal year ended December 31, 2022, mainly explained by the fall in international reference prices.

The following table shows the oil and gas segment’s production and sold volume:

Note: Production in Argentina.

Cost of sales from the oil and gas segment increased by 18%, to US$412 million, for the fiscal year ended December 31, 2023, against US$350 million for the fiscal year ended December 31, 2022, mainly due to higher PPE depreciation resulting from the substantial investment in the gas-operated areas, added to higher contractor labor and gas transportation and maintenance costs associated with increased gas production.

Gross income from the oil and gas segment decreased by 14%, recording profits of US$254 million for the fiscal year ended December 31, 2023, compared to US$296 million for the fiscal year ended December 31, 2022. This variation is explained by lower oil sales and higher contractor, maintenance, depreciation and gas transportation costs, partially offset by higher sold gas volumes. Additionally, the gross margin on sales decreased by 38% in the fiscal year ended December 31, 2023, compared to 46% in the fiscal year ended December 31, 2022.

The oil and gas segment selling expenses increased to US$49 million in the fiscal year ended December 31, 2023, against US$45 million in the fiscal year ended December 31, 2022, mainly due to the higher transportation cost of exported gas.

Administrative expenses from the oil and gas segment increased by 23%, to US$74 million, for the fiscal year ended December 31, 2023, compared to US$60 million for the fiscal year ended December 31, 2022, mainly explained by higher labor costs.

Oil and gas segment exploration expenses recorded a US$7 million loss in the fiscal year ended December 31, 2023, on account of the relinquishment of the Río Atuel block, whereas no expenses were recorded for the fiscal year ended December 31, 2022.

Other net operating income and expenses from the oil and gas segment recorded a higher profit of 54%, reaching US$54 million in the fiscal year ended December 31, 2023, against US$35 million in the fiscal year ended December 31, 2022. This variation corresponds mainly to higher interest on late payments, mainly to CAMMESA and IEASA, and higher revenues from exports settled at CCL FX associated with the Export Growth Program. These effects were partially offset by lower Plan Gas.Ar subsidies and higher environmental remediation and debit and credit tax charges.

The oil and gas segment recorded PPE and inventory impairment charges for US$38 million in the fiscal year ended December 31, 2023, a 27% increase compared to the same period of 2022, with a US$30 million charge. This variation is explained by the reserve reduction at Rincón del Mangrullo and the lower recoverability at El Tordillo due to the proximity to the concession’s expiration.

The impairment in financial assets from the oil and gas segment recorded US$2 million losses for the fiscal year ended December 31, 2022. In contrast, no charges were recorded for the fiscal year ended December 31, 2023.

The oil and gas segment operating income decreased by 28%, to US$140 million profit for the fiscal year ended December 31, 2023, against US$194 million for the fiscal year ended December 31, 2022. This variation was mainly due to increased costs and operating expenses from higher activity and lower oil sales. These effects were partially offset by higher sold gas volumes. The operating margin on sales for the fiscal year ended December 31, 2023 amounted to 21%, against 30% in the fiscal year ended December 31, 2022.

The oil and gas segment’s net financial results recorded losses of US$216 million for the fiscal year ended December 31, 2023, 62% higher than US$133 million reported in the fiscal year ended December 31, 2022, mainly due to higher financial interest losses and net FX differences, partially offset by better results from the holding of financial securities.

The oil and gas segment recorded an income tax benefit of US$29 million for the fiscal year ended December 31, 2023, against US$16 million losses for the fiscal year ended December 31, 2022.

The oil and gas segment recorded a US$47 million loss for the fiscal year ended December 31, 2023, against US$45 million profit for the fiscal year ended December 31, 2022, both fully attributable to the Company’s shareholders.

Petrochemicals segment

Sales from the petrochemicals segment reached US$507 million in the fiscal year ended December 31, 2023, 18% lower than US$617 million in the fiscal year ended December 31, 2022, mainly due to a fall in local and international reference prices and to a lower extent, to a lower traded volume of petrochemical products.

Total sold volumes for the fiscal year ended December 31, 2023 decreased by 4% compared to the fiscal year ended December 31, 2022. The following table shows sales volumes in the petrochemicals segment:

Cost of sales from the petrochemicals segment decreased by 17%, to US$444 million, for the fiscal year ended December 31, 2023, against US$536 million for the fiscal year ended December 31, 2022, partially explained by lower raw material costs due to the decrease in international reference prices and traded volumes.

The petrochemicals segment gross profit decreased by 22%, to US$63 million, in the fiscal year ended December 31, 2023, compared to US$81 million in the fiscal year ended December 31, 2022, mainly accounted by lower margins in the SBR, styrene and reforming businesses, which costs exceeded average selling prices. This was offset by a higher margin in the polystyrene business, mainly in the local market. The gross margin on sales was 12% and 13% for the fiscal years ended December 31, 2023 and 2022, respectively.

Selling expenses from the petrochemicals segment decreased by 12%, to US$15 million, for the fiscal year ended December 31, 2023, against US$17 million for the fiscal year ended December 31, 2022, mainly due to lower transportation charges, taxes, duties, rates and contributions.

Administrative expenses from the petrochemicals segment reached US$6 million for the fiscal year ended December 31, 2023, a 20% increase compared to US$5 million in the fiscal year ended December 31, 2022, explained by higher labor costs.

Other net operating income and expenses from the petrochemicals segment recorded a profit of US$6 million for the fiscal year ended December 31, 2023, against US$5 million losses for the fiscal year ended December 31, 2022, mainly due to higher revenues from exports settled at the CCL FX rate under the Export Growth Program.

The inventory impairment charge recorded a US$3 million loss in the fiscal year 2023, compared to a US$2 million loss in 2022.

Operating income from the petrochemicals segment amounted to US$45 million for the fiscal year ended December 31, 2023, a 13% decrease compared to US$52 million for the fiscal year ended December 31, 2022. The operating margin on sales for the fiscal year ended December 31, 2023 amounted to 9%, against 8% in the fiscal year ended December 31, 2022.

The petrochemicals segment recorded a net financial profit of US$12 million for the fiscal year ended December 31, 2023, far superior to US$3 million reported in the fiscal year ended December 31, 2022. The variation is mainly due to higher net profits from FX differences on AR$-denominated debts.

The petrochemicals segment recorded an income tax charge of US$27 million for the fiscal year ended December 31, 2023, against a US$15 million charge for the fiscal year ended December 31, 2022, mainly due to higher pre-tax earnings.

The petrochemicals segment recorded a net profit of US$30 million for the fiscal year ended December 31, 2023, a 25% decrease compared to US$40 million for the fiscal year ended December 31, 2022, both fully attributable to the Company’s shareholders.

Holding and others segment

Sales from the holding and others segment decreased by 30%, recording US$14 million and US$20 million during fiscal years ended December 31, 2023 and 2022, respectively, explained by lower accrued fees.

As no sales costs were recorded, gross profits from this segment were also US$14 million and US$20 million for the fiscal years ended December 31, 2023 and 2022, respectively.

Administrative expenses from the holding and others segment increased by 45%, to US$55 million, for the fiscal year ended December 31, 2023, compared to US$38 million for the fiscal year ended December 31, 2022, mainly due to higher compensation agreement charges associated with the better stock performance.

Other net operating income and expenses from the holding and others segment recorded a US$19 million loss for the fiscal year ended December 31, 2023, compared to a US$35 million profit for the fiscal year ended December 31, 2022. This variation corresponds mainly to the US$37 million compensation received in 2022 under the arbitration complaint in Ecuador and, to a lower extent, higher debit and credit tax charges and provisions for contingencies.

The holding and others segment’s intangible asset impairment registered a US$2 million recovery for the fiscal year ended December 31, 2023, compared to US$6 million losses for the fiscal year ended December 31, 2022.

No financial asset impairment results were recorded in the holding and others segment for the fiscal year ended December 31, 2023, against US$2 million losses for the fiscal year ended December 31, 2022, mainly due to tax credits.

The results of the sale of participation in the holding and others segment recorded a US$9 million profit in the fiscal year ended December 31, 2023. In contrast, no charges were recorded for the comparative fiscal year.

The holding and others segment results for participation in associates and joint businesses recorded US$16 million profit for the fiscal year ended December 31, 2023, 60% lower than the US$40 million disclosed in the fiscal year ended December 31, 2022. This variation is mainly explained by lower profits from the stakes in CITELEC and CIESA, partially offset by a higher result from the interest in OCP at the end of the fiscal year ended December 31, 2023 and losses from the interest in Refinor recorded in 2022.

Operating results from the holding and others segment recorded a US$33 million loss for the fiscal year ended December 31, 2023, compared to US$49 million profit for the fiscal year ended December 31, 2022. This variation is mainly explained by lower results from participation in associates and joint businesses, the recording of the compensation receivable under the arbitration complaint in Ecuador in 2022, and higher operating expenses. These effects were partially offset by higher profits at OCP.

Net financial results from the holding and others segment recorded a US$240 million profit for the fiscal year ended December 31, 2023, against a profit of US$89 million for the fiscal year ended December 31, 2022, mainly due to higher net FX profits resulting from the higher devaluation over the passive monetary position, partially offset by higher tax interest losses.

The holding and others segment recorded an income tax charge of US$95 million for the fiscal year ended December 31, 2023, compared to a US$20 million charge in the fiscal year ended December 31, 2022, mainly due to improved pre-tax earnings.

The holding and others segment recorded a profit of US$112 million for the fiscal year ended December 31, 2023, 5% lower than US$118 million reported for the fiscal year ended December 31, 2022, both fully attributable to the Company’s shareholders.

To establish a clear, transparent and consistent practice allowing shareholders to make informed decisions, all of this in consonance with the Company Bylaws and the applicable legal and regulatory framework in force, the Company has implemented a Dividend Policy setting the guidelines to maintain a proper balance between distributed amounts and Pampa’s investment plans.

Annually, the Board of Directors prudently assesses the possibility of paying dividends to shareholders within each fiscal year, analyzing the economic circumstances prevailing at the time with particular attention.

In fiscal year 2024, we do not plan to pay cash dividends on our ordinary shares or ADS. All available funds and profits will be retained to apply them to the operation and expansion of our businesses, further strengthening Pampa’s operating capacity and strategic position in the Argentine energy market.

Results for the fiscal year recorded profits of AR$34,488 million, which added to FX translation differences in the amount of AR$146,139 million, total of AR$180,627 million retained earnings as of December 31, 2023. Consequently, the Board unanimously resolves to propose to the Shareholders’ Meeting:

In this sense, the Company is not planning to pay dividends to retain all funds and apply them to and/or have them available for:

All of this is in line with the Company’s Dividend Policy.

Finally, we would like to express our gratitude to everyone who has shaped Pampa Energía into the largest independent energy integrated company in Argentina. To all of them, shareholders who rely on us, advisors, customers and suppliers, a warm vote of thanks.

City of Buenos Aires, March 6, 2024.

THE BOARD OF DIRECTORS

Appendix I: Corporate governance report

The Board has drawn up the following report on the degree of application of the principles set out in the Code of Corporate Governance for the fiscal year ended December 31, 2023, under the CNV Rules (Sect. 1, Title I, Chapter I of Part IV), as restated in 2013 and amended by CNV General Res. No. 797/19.

The Code of Conduct approved by our Board sets out Pampa’s vision, mission and values and the conduct expected from the Company members in their daily activities and long-term decisions. The Code of Conduct reflects the values and encourages a strong commitment to honesty and transparency. It is also underpinned by respect for diversity, the community, and the environment, as well as working with excellence as a team14. In addition, Pampa has an Ethics Committee, which mission is proactively ensuring respect for business ethics and integrity.

Moreover, Pampa has a policy against fraud, corruption and other irregularities, approved by the Board of Directors, which reaffirms transparency and ethics as essential behaviors to lead the Company’s business and achieve sustainable growth. This policy prohibits fraud, corruption in any form and any act of misconduct within the Company, complementing the principles and values defined in our Code of Conduct. As explained above, the Company applies the recommended practice.

14 For further information, see Practices 22 and 23 in Appendix I to this Annual Report.

Regarding the Board of Directors, the Company applies the practice considering several indexes, factors, risks and projections analyzed by the management, as well as the environmental, social, health and safety aspects detailed in the Annual Sustainability Report. In line with Pampa’s strategy, it approves an annual budget guiding all the sectors’ activities in the following fiscal year. The Executive Financial and M&A Department develops and oversees compliance with the strategy and budget.

In this line, in January 2022, Pampa issued its first ‘Green Bond’15 to fund the construction of PEPE IV. Also, in April 2023, the Company issued a second ‘Green Bond,’ in which proceeds were applied to the construction of PEPE VI. These issuances reflect the Board and the Company’s commitment to financing projects that positively impact the environment and diversify the country’s energy generation matrix. Moreover, they exemplify how the Board leverages several factors to guide its decisions, aligning them with the Company’s general strategy.

The Company adopts the Integrated Internal Control Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (‘COSO Report’) to evaluate the effectiveness of internal controls that mitigate the risks threatening the reliability of accounting and financial information. In this sense, the Board approved Pampa’s organizational chart, which includes the following reporting lines:

Pampa also has an Audit Committee consisting exclusively of independent directors, who are responsible for supervising the internal control system.

The Company applies the recommended practice since, at least quarterly, a report is submitted to the Board detailing relevant events and analyzing the main management indicators. This practice allows the Board to learn about the obtained results and assess the Company’s performance.

Additionally, continuous Board-management interaction is encouraged, with members of different departments participating in Board meetings to address specific queries to ensure the Board’s effective monitoring of the objectives set for the year. Pampa values the interaction between the Board of Directors and the management (including the Board’s members exercising executive functions) as an enriching factor to control and understand performance. All the Board members’ preparation and professional credentials allow for an open and sincere discussion on management.

15 For further information, see section 7.2 of this Annual Report.

Lastly, and as detailed in the different Practices set out in Appendix I to the Annual Report, Pampa implements various initiatives to guarantee a proper internal control environment, such as the Integrity Program (Practice 23), the Code of Conduct (Practices 1, 22 and 23), the Policy against Fraud, Corruption and other Irregularities (Practices 1 and 23), a whistleblower channel for reporting suspected misconduct (Practice 23), several Corporate Governance policies described throughout the Annual Report and this Appendix and the corporate risk management (Practice 17), among others.

In line with best practices, the Board approves the various corporate governance policies applicable throughout the Company. Besides, as described in Practice 1, it monitors their implementation, adjusting them to the Company’s reality. In this sense, the Board periodically checks the existing policies, advising the Board to review, update and/or modify them. As a result, in recent years, the Board of Directors has approved and/or updated several policies, such as the Policy against Fraud, Corruption and other Irregularities, Best Security Trading Practices, Related-Party Transactions, Material Information Disclosure, Compensation, Nomination, Dividends and Integrated Management. On the other hand, it regularly monitors the Company’s Integrity Program.

In addition, in compliance with NYSE regulations, on November 8, 2023, the Board of Directors approved its Clawback Policy. The policy describes the circumstances under which Pampa will recover erroneously awarded compensation and the applicable procedure, all per the Standards for Recovery under Section 10D of the Exchange Act and any applicable rules or standards adopted by the SEC.

Lastly, the Board analyzes whether specific committees are needed to apply different policies. If it determines that a particular committee is not necessary, the Board delegates its application, monitoring, and review to the area in which it feels competent to such effect. In the way detailed, the Company applies the recommended practice.

Board members’ dedication to tracking issues submitted for their approval, follow-up and monitoring, and receiving information before meetings to facilitate efficient decision-making reflect the Company’s application of good corporate governance practices. Likewise, the participation of certain directors in executive functions provides daily contact in its administration, leveraging understanding and monitoring of daily operations.

Regarding Board members’ professionalism, as established in our Nomination Policy, the evaluation of candidates to be presented to the Shareholders’ Meeting takes into consideration criteria such as independence, diversity, age, skills, experience, knowledge of the Company’s business and industry, and possible incompatibilities to guarantee the Board’s diversity.

Moreover, the Board and its Committees (the Audit, Compensation and Nomination Committees) have their respective internal rules governing their functioning, which are available on our website. These rules mainly describe matters concerning the directors’ powers and responsibilities and the holding of meetings. The Company applies the recommended practice in the way described above.

The Company applies the recommended practice as it has a corporate secretary under the Board of Directors’ Rules and Regulations published on our website. It schedules and coordinates the meetings of the Board and its different Committees within its scope. These meetings are convened as per the provisions of each applicable regulation, and the necessary documentation is attached so that directors may analyze the topics to be addressed in advance. This process is always carried out under the supervision of the Board’s Chair and the respective Committees16.

Annually, Pampa’s Board performs a self-assessment questionnaire, enabling analysis and evaluation of its performance and management. Each director completes this self-assessment, which the Legal Affairs Executive Department analyzes. Based on the results, and if necessary, this department proposes measures to improve the body’s performance. This process allows for the evaluation the Board’s proper internal functioning, thus applying the recommended practice.

The Company follows the practice as described below. The Chair leads the Board of Directors’ meetings, ensuring its orderly progress, facilitating its proper development, and coordinating the body’s correct functioning through the Board’s corporate secretary. In the Chair’s absence, meetings are presided over by the Vice-chair or any other Board member if both are absent. Meetings are convened within the terms established in the body’s regulations to guarantee that the Board members have access to the information and enough time to analyze it.

16 For further information, see Practice 9 in Appendix I to this Annual Report.

Besides, directors serving executive functions are in permanent contact with Pampa’s different areas and their daily management, providing them with a comprehensive vision of the business and constant updates on relevant issues. In Board meetings, members of the different departments are invited so that they may answer queries on specific topics, thus ensuring monitoring and follow-up of the goals set for the fiscal year. This update extends to independent directors who are members of the Audit Committee, also within the scope of this body.

The Company implemented a continuous training process for the Company’s Board members in different key areas to properly exercise their duties. In this sense, during fiscal year 2023, several training activities on Oil and Gas Reserves and Cybersecurity —key issues for the Company’s development— were conducted within the scope of the Audit Committee, inviting all Board and Supervisory Committee members. This process will continue in fiscal year 2024.

Pampa applies the recommended practice as it has a Board of Directors’ corporate secretary within the scope of the Legal Affairs Executive Department, which main duties are as follows: (i) coordinating the agendas for Board meetings jointly with the Board’s Chair and the other members, as well as with the management, ensuring that the Board may address critical social performance issues; (ii) organizing the advance preparation and submittal of the required information for Board meetings; (iii) coordinating the drawing up, dissemination and approval of the meetings’ minutes; (iv) facilitating communication among Board members, the management and their counselors; (v) filing the Board meetings’ documentation; (vi) performing the same functions for the other Company Committees created within the Board’s scope; (vii) coordinating Shareholders’ Meetings, the shareholders’ registry and the participation of directors in the meetings; (viii) preparing, updating and sending the onboarding program for the new Board members; and (ix) performing all administrative procedures associated with the Board of Directors, the Committees, and the Shareholders’ Meeting. Thus, the Board’s Chair may supervise these functions without losing focus on its primary role.

Even though there is no specific plan regulating its succession line, the Company applies this practice and its respective principles since the Board has considered the organizational structure and appointed its CEO and CFO. To such effect, it has assessed the potential candidates’ personal and professional qualifications. It is worth highlighting that the Board Chair’s role differs from that of the CEO. In this sense, the Board’s Chair, jointly with the Human Resources department, establishes, in alignment with the Company’s mission, vision and values, the characteristics and values required of the CEO’s successor. Currently, a succession plan is not deemed necessary.

The Company applies the recommended practice since, as of the issuance of the Annual Report, the Board of Directors has three independent directors and two independent alternate directors[1]. Moreover, as mentioned in Practice 3, the Audit Committee consists exclusively of independent members, exceeding the local regulations’ requirements, which only provide for most members.

Pampa’s Board of Directors approved its Nomination Policy, under which a Nomination Committee was created to assist Pampa’s Board and Shareholders’ Meeting in the Board members’ nomination and appointment process.

This committee reports to Pampa’s Board and comprises three regular members and an equal or smaller number of alternate members. The Chair is independent according to the CNV rules. Therefore, the Company applies the recommended practice.

Pampa’s Board approved the Nomination Policy detailed in the previous practice, which sets the general guidelines regarding independence, incompatibilities and diversity among Board members. Under this policy, a Committee was created to describe the nominees’ identification and evaluation process and assist the Board and shareholders so that they may have all the necessary elements to select nominees at the Shareholders’ Meeting in compliance with the applicable legal provisions and particularly, section 12 of Pampa’s Bylaws. This section establishes the selection method for directors elected upon candidate lists, thus ensuring greater transparency in the process.

Moreover, this Committee performs a prior and non-binding assessment of the candidates the Board has deemed fit to cover vacant positions. The Committee considers factors such as independence, diversity, age, skills and experience, among others, to determine their suitability based on objective criteria and within an equal opportunity framework. As of this date, the Company’s Board is comprised of members with diverse professions, such as degrees in economics and business administration, financial advisors, engineers, and lawyers, among others. Of the 16 directors, 8 are women (3 regular and 5 alternate). All directors receive the same compensation, thus ensuring diversity and a culture of inclusion, advancing analysis, discussion and fair decision-making. In the way described, the Company applies the recommended practice.

The Company applies the recommended practice since the Board, through its Corporate Secretary, provides new members with an onboarding program that includes a general overview of the Company and its main corporate bodies, corporate governance practices, Code of Conduct, and main policies. In addition, they are provided with the necessary documentation and information to perform their duties. New members are added to the Board of Directors’ distribution list to have the essential documentation before their first participation in a Board meeting. Finally, meetings are coordinated with leaders of each area, allowing new members to dispel their doubts and become acquainted with the Company’s business. Pampa’s managers are available to provide answers and supplement all the information the directors may require within the framework of permanent interaction set out in Practice 8 in Appendix I of this Annual Report.

[17] Although Pampa's shareholders' meetings held on April 27, 2022 and December 27, 2022 appointed 5 independent directors and 5 independent alternate directors, on September 12, 2023 and November 29, 2023, Mr. Darío Epstein and Ms. María Renata Scafati, respectively, resigned from their positions as independent directors. Moreover, on November 22 and 29, 2023, Mmes. Diana Mondino and Emilse Juárez, respectively, resigned from their positions as alternate independent directors. These resignations were approved by the Company's Board of Directors at the meetings held on November 8, 2023, December 14, 2023 and January 4, 2024. Their replacements will be appointed at the next Annual Shareholders’ Meeting.

Following our Compensation Policy, Pampa has a Compensation Committee assisting it and/or the Shareholders’ Meeting in Board compensation matters and preparing and monitoring policies and/or compensation plans and/or benefits for Board members. This policy establishes that the remuneration of the Board’s members should be proportionate to that collected in domestic peer companies.

The Compensation Committee, which reports to Pampa’s Board, comprises three regular members and an equal or smaller number of alternate members, who may not serve executive functions at Pampa. Currently, all its members are independent. In the way described, the Company applies the recommended practice.

Pampa applies the recommended practice since it has a Compensation Policy that provides that the Compensation Committee should render its prior opinion so that directors’ compensation is in line with that received by domestic peers’ directors and per the applicable laws and the CNV rules. The committee’s opinion is reported to the Board of Directors and the Shareholders’ Meeting.

Pampa’s policy on compensation and benefits seeks to ensure external competitiveness and maintain in-house equality. In this line, different surveys are used to adjust our benefit packages and wage structure according to market offers.

Regarding senior management, including Pampa’s CEO and key staff, in 2017, the Board approved variable compensation plans to align their performance with the Company’s strategic plans and establish a clear and direct link between shareholder value creation and these officers’ compensation.

Pampa implemented a risk management methodology to identify the main risks affecting Pampa. The Board of Directors initially approved the ‘Risk Management Handbook,’ which was later updated and restated as the ‘Risk Management Policy.’

This Policy establishes responsibilities, functions, and methodologies to detect and assess strategic risks affecting Pampa’s businesses and operations. The administration department updates Pampa’s strategic risk map based on the administered businesses.

The Policy establishes responsibilities and methodologies for risk determination with the Audit Committee’s assistance, which is responsible for overseeing its application. The main critical risk factors taken into consideration for Pampa’s analysis include:

The administration department is responsible for including the necessary tests to detect risk indicators and signals in its annual programs, monitor the process’ effectiveness and ensure control and compliance with this policy. In addition, it reports to Senior Management and the Audit Committee on the risk management process and follows up on implementing corrective action plans. Moreover, the administration management endeavors to keep the risk matrices updated, assisting in risk identification and assessment and the follow-up of the derived action plans, keeping the Management and the Audit Committee informed.

The Company discloses the performed financial risk management in its FS, distinguishing by type of risk and describing the strategies or actions to mitigate them. Additionally, when preparing and submitting the 20-F Form before the SEC, it describes the risk factors to which Pampa is exposed. In the way described, Pampa applies this practice.

Pampa applies the recommended practice since the Internal Audit Department reports functionally to the Audit Committee and administratively to the CEO.

At the beginning of each fiscal year, the internal audit area submits its proposed annual work plan to the Audit Committee for its review and approval, including the necessary resources for its implementation. The Internal Audit Department submits a quarterly progress report to the Committee, detailing the progress, work performed, and most relevant findings.

Annually, the Audit Committee evaluates the Internal Audit’s independence and performance in its competence areas, reflecting its conclusions in its annual report.

The Company applies the recommended practice since, as mentioned in Practice 18, its Internal Audit Department reports directly to the Audit Committee, which evaluates its independence annually.

Pampa’s Internal Audit Department is composed of highly skilled professionals because of their education and training and their experience in the area.

This department has rules that align with the best practices and standards suggested by The Institute of Internal Auditors. To fulfill its functions, the Internal Audit Department has full and unrestricted access to the Company’s records, files, documents, assets, employees and teammates with no time or manner restrictions. It can audit autonomously at any level of the organization, including management levels.

Pampa applies the recommended practice since it has an Audit Committee acting based on its rules, which establish its functions and operating rules. As mentioned in Practice 3, the Committee is composed entirely of independent members, thus exceeding local requirements, which only require an independent majority. Its duties include: (i) expressing its opinion on the Board’s proposal to appoint external auditors and ensuring their independence, reviewing the external and internal auditors’ plans and assessing their performance, issuing an opinion at the time of presentation of the annual FS; (ii) supervising the internal control system and risk management; (iii) rendering its opinion on related-party transactions for a relevant amount, disclosed to the market under the legal regulations in force; (iv) expressing its opinion on the compensation proposals submitted by the Board; (v) rendering its opinion on the conditions for the issuance of shares or convertible securities in the case of a capital increase; and (vi) checking compliance with the applicable standards of conduct.

The Board of Directors seeks to ensure that most Audit Committee members have professional financial and/or accounting expertise, an aspect to be assessed when nominating new Board members and considered by the Nomination Committee in its prior opinion. Moreover, the Audit Committee should appoint one of its members as a financial expert, as Title 407 of the Sarbanes-Oxley Law requires.

Upon the presentation and publication of Pampa’s FS, the Audit Committee assesses the external auditor’s independence, planning and performance. This assessment considers several objective indicators, such as the overall quality of presentations to the Audit Committee, presentation of key audit issues, use of technology, prompt response to audit-related services, and experience in the industry and the profession, among others. Under Sect. 18, Title V, Chapter III of the CNV Rules (restated in 2013) and the Audit Committee’s internal rules, an informed opinion is issued in this regard.

Throughout the year, the Committee holds quarterly meetings with the external auditors, coinciding with the review of the Company’s quarterly FS and whenever it deems necessary.

Moreover, Pampa has an external auditor services pre-approval policy, which standardizes an internal process allowing the Audit Committee to grant prior approval to hiring the external auditor to render any authorized service to the Company or its subsidiaries. In this way, the Company applies this practice.

Pampa has a Code of Conduct that serves as a guide for making honest decisions in our daily activities, defining how we pursue our challenges and establishing fundamental principles to ensure a service of excellence for our customers and build relationships with suppliers, teammates, shareholders, authorities, intermediate organizations and the community at large.

The Code of Conduct is available on Pampa’s website and must be expressly accepted by all the Company employees and Pampa’s Board and Supervisory Committee members. Therefore, the Company applies this recommended practice.

Pampa applies the recommended practice through its Integrity Program, which unifies internal actions, mechanisms and procedures to promote integrity and prevent, detect and correct possible irregularities and illegal acts. This Program has been designed following the mandatory and optional requirements provided in Sect. 22 and 23 of Law No. 27,401 and other applicable regulations.

The Board has defined that Pampa’s internal audit department will be internally responsible for leading, developing, coordinating and supervising the Program. Available mechanisms include the Ethics Hotline, an exclusive channel to report any suspected misconduct or breach of the Code of Conduct on a strictly confidential basis. This channel is available through different means (toll-free telephone line, chat, e-mail and website) and is operated by an external provider to ensure information transparency and integrity. Additionally, the Company has policies and procedures describing the process for analyzing and handling received complaints. In this regard, on November 19, 2023, the Audit Committee approved an update of the Procedure for Handling Complaints.

The channel’s responsibility rests with the Audit Committee, which delegates its management to the Internal Audit Department. Internal Audit submits quarterly reports to the Audit Committee on cases received and resolutions adopted, and the Committee oversees the channel’s operation and the resolution of complaints in issues within its authority. Pampa also has policies to support the Program, including:

These provisions, together with the Code of Conduct, include clauses on the obligation to report any actual or suspected violation of laws and/or regulations, as well as the prohibition of retaliation against anyone filing a report, legitimately and in good faith, or refusing to participate in acts of corruption. In fiscal year 2023, the Company carried out different dissemination and awareness-raising actions on the Program’s contents targeted at all employees.

The Code of Conduct’s guidelines establish that all individuals within its scope should avoid conflicts of interest. There is a conflict of interest whenever personal interests interfere or appear to interfere (either directly or indirectly) with responsibilities to Pampa, conditioning (or appearing to condition) the objectivity of each member’s decisions. These guidelines are developed in the Conflicts of Interest Policy, which defines what Pampa considers a conflict of interest and describes the steps to take if a Company member is involved in this kind of situation to guarantee compliance with the law and with our Code of Conduct and Policy Against Fraud, Corruption and Other Irregularities.

Pampa also has a Policy on Related-Party Transactions that provides that all high-value transactions, i.e., for an amount equal to or higher than 1% of Pampa’s shareholders’ equity, involving individuals and/or legal entities considered related parties under Sect. 72 of the CMA should be subject to a specific prior authorization and control procedure. The procedure is carried out under the coordination of Pampa’s executive legal department and involves both Pampa’s Board of Directors and Audit Committee (as applicable). This policy strictly follows the guidelines set out in the current regulations in force (Sect. 72 of the CMA).

Pampa discloses itemized information on contracts executed with related parties in its annual and interim FS in compliance with these regulations. Additionally, all high-value transactions with related parties are submitted to the Audit Committee’s consideration and promptly reported under the caption ‘relevant event’ to both the CNV and the markets where Pampa is listed.

Finally, among its responsibilities, the Audit Committee must provide the market with complete information on transactions that may generate a conflict of interest with members of the corporate bodies or controlling shareholders. It also renders a well-founded opinion on related-party transactions in the cases provided by legislation and, in compliance with the law, issues communications whenever there may be an alleged conflict of interest at Pampa. Moreover, when the Board must address an issue where a director may have a personal interest, that director is prevented from voting. In the way described, the Company applies this practice.

Pampa applies the recommended practice as it has a website with a dedicated ‘Investors’ section that includes all types of relevant information (FS, filings before regulatory authorities including the SEC and the NYSE, relevant events, corporate governance policies, among others) for shareholders and the general investment community. The investor relations and sustainability department permanently update this site.

This website serves as an information repository and a channel for receiving and handling inquiries. The shareholder and investor relations team is responsible for dealing with these inquiries expertly.

Additionally, the Company has a presence on social media (Facebook, Instagram, Twitter and LinkedIn) to publish relevant information and interact with its followers. The company fosters communication and transparency through these platforms, thus applying the recommended practice.

At Pampa Energía, we believe proximity, transparency and cooperation are fundamental pillars to building and strengthening long-term relationships with our internal or external stakeholders. Following the guidelines offered by AA1000SES - Accountability, the last materiality assessment conducted in 2021, the Strategic Map and the Balanced Scoreboard, and GRI’s Oil and Gas Sector Standard, we have identified our main stakeholders based on accountability, influence, proximity, dependence and representation. The Company lists its main stakeholders in the Sustainability Report, published annually and available on our website, jointly with the communication channels where the dialog is maintained:

As our operations have a broad geographical scope and a high complexity, decentralization is also a characteristic of our key players’ identification and dialog process. Each asset maps its target audiences, needs and actions to achieve a positive social impact on local communities.

Following the Strategic Map and Balanced Scorecard method, a process was developed to define priority stakeholders, map relevant topics, set relationship-building goals and intervention priorities, and implement concrete action plans for stakeholders. The project covered all the power generation assets in Buenos Aires, Bahía Blanca, Mendoza, Neuquén and Salta. In this way, we strengthen our sustainable management model by involving the assets’ teammates who make decisions at the local level, achieving a more efficient implementation of actions for a higher impact on the business and the community.

In 2023, the process for identifying the material topics for the Sustainability Report was reviewed. We started from the results obtained in the last materiality survey conducted in 2021, where we recorded assessments by our stakeholders and experts consulted, with more than 500 responses and more than 350 comments, which allowed us to prioritize the most significant impacts to report. In addition, we conducted a comprehensive analysis to ensure completeness and avoid omitting any relevant topic. This analysis included the review of our Risk Map, trends in our industry, the material issues identified by the leading companies in the world and Argentina, and the material issues highlighted by international reporting standards such as Global Reporting Initiative (GRI) and the Sustainability Accounting Standards Board (SASB). The investor relations and sustainability department referred all material topics and the main comments and opinions to the Company’s Board. In the way described, the Company applies the practice.

When calling for a meeting, the Company’s Board formulates proposals for each item on the agenda, except in cases of possible conflicts of interest, where it will refrain from submitting a proposal. Any information supporting the topics to be addressed in the Shareholders’ Meetings is placed at the disposal of all shareholders well in advance so that they may perform their analysis and vote accordingly.

The shareholders and the general investment community may make the necessary inquiries through the formal channel mentioned in Practice 25. This allows shareholders to attend the Meeting with precise information, received well in advance, on the topics to be discussed.

It is worth highlighting that Pampa provides the necessary means to maintain a permanent and fluid dialog with its shareholders, not only when calling for a Shareholders’ Meeting. In this sense, shareholders have at their disposal: (i) the communication channel described in Practice 25 in Appendix I of this Annual Report; (ii) the investor relations department, which receives and manages shareholders’ concerns; (iii) quarterly videoconferences to disclose results and interact with the management; and (iv) management and Board members’ attendance to the Shareholders’ Meeting, with the possibility of raising general management questions once the treatment of all formal items has concluded. In the way described, the Company applies the practice.

The Company places the proposals mentioned in the previous item at the disposal of shareholders and investors through the communication channels set by the regulatory bodies (ByMA, CNV, SEC) and the Company’s website, ri.pampaenergia.com. Moreover, as previously mentioned, shareholders can maintain a permanent and fluid dialogue with the Company throughout the year. Besides, Section 30 of the Company’s Bylaws allows for holding Shareholders’ Meetings virtually with the simultaneous transmission of sound, images and words. Due to the above, the Company applies the recommended practice.

The Company applied the recommended practice since Pampa’s Board approved its Dividend Policy in 2018. This Policy outlines the guidelines for adequately balancing distributed amounts and PaThe Company has applied the recommended practice given that Pampa’s Board approved its Dividend Policy in 2018, which outlines the guidelines for adequately balancing distributed amounts and Pampa’s investment plans. Its purpose is to establish a clear, transparent, and consistent practice that allows shareholders to make informed decisions in line with the Company’s Bylaws and the applicable legal and regulatory framework in force. Based on this policy, the Board of Directors prudently assesses the possibility of paying dividends to Pampa’s shareholders within each fiscal year, analyzing the economic circumstances prevailing at the time with special attention.

Glossary of terms