Argentina’s state-run energy company YPF said Friday that its board of directors approved a proposed sale of 55 conventional oil and natural gas fields, as it seeks to replicate a divestment strategy that doubled the production of its Brazilian counterpart, Petrobras.

The planned sale is designed to “optimize” the company’s conventional upstream portfolio, allowing it to more efficiently allocate capital to assets that have more scale and provide “greater profitability and resilience at different scenarios,” YPF said in a securities filing.

The maturing conventional fields marked for sale have passed their peak production levels, making it costly and less efficient for a big company like YPF to keep them in operation, it said. By comparison, YPF said smaller companies can develop these maturing fields with leaner structures.

The company did not list the oil and gas fields or say when they would be sold.

The decision to sell them, however, will bolster its bottom line with a “non-cash impairment” of $1.8 billion, or $1.2 billion after taxes, YPF said.

The looming divestments are part of a “4×4 plan” that Horacio Marín unveiled in December after being appointed CEO and chairman of the company by the new government of right-wing libertarian President Javier Milei. The goal is to rebuild the value of the company over the next four years, taking its American depository receipt to some $60. That would be up from a close of nearly $18 on Friday.


FOLLOWING SUIT

In early February, a company source said the divestment plan is similar to one carried out by Petrobras. The state-owned Brazilian company started selling mature fields and other non-core assets in 2013 to focus on developing the country’s large deep-water pre-salt play.

The result was a doubling of its output between 2016 and 2020, a feat that likely will be repeated by 2029, the YPF source said at the time.


YPF, for its part, will shift its focus to Vaca Muerta in northern Patagonia, one of the world’s biggest shale deposits.

The objective is to take its upstream portfolio to 80% Vaca Muerta, 20% conventional fields from a current 50/50, helping to boost output and cut costs given that shale is more productive at a lower cost per investment than the former, according to the company source.