• Repsol YPF net income in the second quarter 2000 was 31% up on first quarter figure, at 649 million euros.

• Net income for the first half 2000 was 1,144 million euros.

• 60.7% of first half income came from operations outside Spain.

• Improved performance was mainly owing to high oil prices over the period, from which the company has been able to benefit since the acquisition of YPF.

• YPF, acquired by Repsol last year for $15 billion, obtained $719 million (752 million euros) net profit in first half 2000.

• All business areas, except oil product marketing, delivered significantly enhanced performance.

• First half cash flow was 3,087 million euros, against 1,101 million euros a year earlier.

• Investments in first half 2000 were 2,279 million euros.

• Several strategic agreements of great importance for the company�s future were established during the period.

Important agreements for the company�s future have been set up during this first half.

 Income statement

Repsol YPF net income for the second quarter 2000 was 31% up on the first quarter figure, at 649 million euros.

Net income for the first half 2000 was 1,144 million euros, and operating income was 278.5% than the 1999 equivalent, at 3,039 million euros.

Improved performance was mainly owing to high oil prices over the period, from which the company has been able to benefit since the acquisition of YPF. Said acquisition took place in June 1999 and involved a disbursement of $15 billion. YPF reported a net profit of $719 million (752 million euros) for the first half 2000.

First half 2000 cash flow was 180.3% up on the equivalent period in 1999, at 3,087 million euros, and investments in business areas amounted to 2,279 million euros.

• Last July, Repsol YPF and Petrobras closed an agreement on an asset swap between the two companies. According to the said agreement, Repsol YPF will receive a 30% stake in the REFAP refinery in south Brazil, and a service station network selling 480 million litres per annum in central, southeast and southern Brazil. Additionally, Repsol YPF will receive a 10% stake in the Albacora Leste oil field. The two companies have also agreed to develop two equal party joint venture combined cycle projects in Brazil with a minimum power of 500MW each.

• On June 7th, Repsol YPF announced two Public Share Acquisition Offerings on Astra and YPF, affiliates in which Repsol YPF holds 67.9% and 97.8% respectively. The purpose of these share acquisition offerings is to progress in integration of the assets and businesses owned by the company in Argentina.

• On July 31^st last, Repsol YPF and the Uruguayan company, ANCAP (Administraci�n Nacional de Combustibles, Alcohol y Portland), signed a protocol agreement for fuel distribution in Uruguay.

• At the end of June, an agreement was reached with the Paraguayan company, Petropar, to develop several joint ventures in the supply, transport, storage and marketing of oil products in the Paraguayan Republic and on other markets.

• In May, Repsol YPF and the Empresa Nacional del Petr�leo de Chile (ENAP) signed a co-operation agreement contemplating joint ventures in upstream activities in Argentina, Chile, Colombia and Venezuela, and in downstream activities in Argentina, Chile, Peru and Ecuador.

• Then, in July, an agreement was set up with the owners of Lipigas on the acquisition of a 45% stake in the latter, which is the leading LPG company in Chile, with a 40% market share.

• In the chemicals business area, Repsol YPF and Borealis, one of the world�s leading producers of polyolefin plastics, signed a Letter of Intent to establish a company combining the Repsol YPF polyolefin assets at Tarragona and Puertollano, Spain, with those owned by Borealis at Sines, Portugal. This deal positions Repsol YPF as leader of the polyolefin industry in the Iberian Peninsula and the Western Mediterranean area.

• The Repsol YPF Annual General Shareholders Meeting was held on June 28th last, and amongst its resolutions were a change in the company�s name to Repsol YPF, S.A., and the payment of a final gross dividend of 0.26 euros per share, representing a 5% increase over the previous year. The overall dividend against 1999 was 0.42 euros per share, equivalent to a pay-out of 49.4%.

• In the area of new technology, on June 20th last, a new Repsol YPF website (www.repsol-ypf.com) was launched, addressed to customers and all consumers and users of Internet. Some 15,000 visitors log on to the site every day, and over 300,000 pages are visited daily.

• Also in the world of e-Commerce, Repsol YPF, BBVA, Iberia and Telef�nica have joined to develop an e-procurement exchange for the acquisition of non-production goods and services required by all four companies. This is the largest purchasing company in Spain via Internet.

• On July 13th last, Repsol YPF gave a strategic presentation to analysts and investors, presenting its strategy with targets for 8% annual growth in hydrocarbon production and 12% in natural gas sales. This strategy is also intended to deliver sustained market leadership in Spain and Argentina, downstream growth in Latin America, and progress in the creation of integrated production-market chains in the gas, refining and marketing business areas. This presentation placed special emphasis on the financial discipline being applied by the company to reduce its debt level, and the target fulfilment already achieved in its ongoing cost savings programmes.

Results by business areas

By areas of activity, these are the highlights for the first half 2000:

In Exploration and Production, first half operating income was 1,887 million euros. This higher income was mainly the result of high oil prices, which reached an average for the period of $26.8 per barrel, and increased production, which reached 1,054,600 boe per day during the second quarter 2000. Performance in this business area was also enhanced by appreciation of the dollar against the euro. It should be noted that income included 301 million euros of capital gain from the sale of North Sea upstream assets.

Operating income from the Refining, Marketing and LPG area, at 578 million euros, was 14.4% higher than that registered a year earlier. This improvement was mainly due to stronger international refining margins, which have allowed Repsol YPF to obtain more than $3 per barrel. This has more than offset the sharp fall in income from the marketing area, which registered a first half loss. Marketing margins were reduced considerably by the difficulty in raising fuel retail prices at service stations in Spain and Argentina to cover the higher international prices of gasoline and gas oil.

The LPG area, however, produced far lower income owing to the price freeze on bottled LPG in Spain.

Operating income from Chemicals was considerably up on the first quarter 2000 figure, at 101 million euros. This improvement was mainly due to higher international margins on base chemicals during the second quarter, and higher sales and margins in derivative chemicals. Total sales of petrochemical products were 23.4% up in relation to the second half 1999, at 1.4 million tons.

In Natural gas and Power, first half operating income was 510 million euros, in comparison to 194 million euros in first half 1999, showing a rise of 163,1%. This improvement was mainly the result of consolidating 100% of Gas Natural SDG results (last year only 45.3% consolidated), and of higher sales to the residential-commercial sector through growth in the customer list, and to the industrial sector in Spain and Latin America as a result of the favourable economic situation.

Repsol YPF distributes natural gas directly or indirectly to a total of 8,582,000 customers, of which 3,443,000 are in Spain, and the remainder in Latin America.

FINANCIAL SITUATION

At June 30th last, Repsol YPF net financial debt was 19.682 million euros. At the close of the first half 2000, the debt to capitalisation ratio was 51,7% in comparison to 53.5% at the beginning of the period. 

(Million euros)

(Unaudited figures)

(Million euros)

(Unaudited figures)

___________________

Ptas/euro = 166,386

(Million euros)

(Unaudited figures)

(Million dolars)

(Unaudited figures)

(Million dolars)

(Unaudited figures)

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Ptas/dolar 2nd Quarter 1999 =161.196

Ptas/dolar 2nd Quarter 2000 =173.953

(Million dolars)

(Unaudited figures)

___________________

Ptas/dolar 1999 =165.229

Ptas/dolar 2nd Quarter 2000 =173.953