The acquisition of YPF was clearly divided in two separate parts. Firstly, on January 20th, 1999, Repsol acquired a 14.99% stake in the company for a total of 2.011 billion dollars under a purchase/sales contract from the Argentine Republic, then owner of approximately 20% of YPF capital equity.

Then, on April 30th, 1999, Repsol launched a public tender offer on all the YPF shares it did not already own. This tender offer was proffered in the following terms: Repsol made a cash offer for all the remaining YPF shares at a price of $44.78 per YPF share and ADS (this was a premium of 25.4% on the closing price on the Buenos Aires Stock Market at the day on which the public offer was launched). On June 23rd, 1999 (closing date of the tender offer), Repsol had acquired 82.5% of the remaining capital equity for a price of $13,036 million, thus becoming title holder of 97.5% of the company.

The YPF acquisition and the consolidation of both corporations has resulted in the creation of a globally competitive oil and gas company.

The foregoing operation has provided important value creation because of the growth potential and highly complementary nature of the assets and management experience of both companies.

YPF, the largest company in Argentina, is an international integrated oil and gas corporation, engaged in the exploration, development and production of petroleum and natural gas. It also generates electricity (upstream) and refines, markets, transports and distributes oil and oil products, derivatives, petrochemicals and LPG (downstream).

As of January 1st, 1999, YPF proved reserves were estimated at approximately 3.2 billion barrels of oil equivalent, and were located in Argentina, Indonesia, U.S.A., Ecuador, Bolivia and Venezuela. In 1998, YPF netted a turnover of $5.5 billion, 62% of which was produced in Argentina.

In Argentina, YPF produced 158 million barrels of oil in 1998, accounting for approximately 51% of domestic production. It also produced 446 Bcf of natural gas.

The company’s refining activity is conducted at three refineries with an overall annual capacity of 122 million barrels (51% of Argentina’s refining capacity). Oil products are distributed through some 2,500 service stations under the YPF flag, and this represents a 37% market share.

International operations are carried out through YPF International Ltd. and Maxus Energy Corporation. Production in 1998 was 31.3 million barrels of oil and 72 Bcf of gas. YPF also has exploration interests of lesser importance in Bolivia, Ecuador and Venezuela. At the close of 1998, developed and undeveloped proved reserves outside Argentina amounted to 371 million barrels of oil, and 1,176 Bcf of natural gas.

Via its affiliate companies, YPF also holds a stake in other upstream operations in Bolivia and Russia, and in downstream activities in Chile, Peru and Brazil.