The purpose of this letter is to comply with the requirements of Article 23 of Chapter VII of the Buenos Aires Stock Exchange Regulations.
In that regard, please be advised that the Board of Directors of YPF S.A. ("YPF"), at its meeting on March 9, 2017, approved the merger by absorption by YPF of YSUR Holdings S.A.U., YSUR Inversiones Petroleras S.A.U., YSUR Inversora S.A.U., YSUR Petrolera Argentina S.A., Petrolera TDF Company S.R.L., YSUR Energía Argentina S.R.L., Petrolera LF Company S.R.L. and YSUR Recursos Naturales S.R.L., whereby these companies will be dissolved without liquidation, as well as the procedures to effectuate this corporate reorganization, with an effective date of January 1, 2017.
On the same date, YPF, as the absorbing company, and YSUR Participaciones S.A.U., YSUR Inversiones Petroleras S.A.U., YSUR Inversora S.A.U., YSUR Petrolera Argentina S.A., Petrolera TDF Company S.R.L., YSUR Energía Argentina S.R.L., Petrolera LF Company S.R.L., and YSUR Recursos Naturales S.R.L., as the merged companies, signed a Preliminary Merger Agreement, through which YPF will incorporate the absorbed companies, with retroactive effect as of January 1, 2017. This was done on the basis of the annual financial statements of each of the companies as of December 31, 2016, to be used as special merger balance sheets and the special merger consolidated balance sheet as of the same date.
Since YPF is a direct and indirect holder of 100% of the shares of YSUR Participaciones S.A.U., YSUR Inversiones Petroleras S.A.U., YSUR Inversora S.A.U., YSUR Petrolera Argentina S.A., Petrolera TDF Company S.R.L., YSUR Energía Argentina S.R.L., Petrolera LF Company S.R.L., and YSUR Recursos Naturales S.R.L., YPF's share capital will not be increased nor will new shares be issued, nor will there be any exchange ratio as a result of the merger.
The aforementioned merger must be submitted for consideration and approval of the respective Extraordinary Shareholders' Meetings of the respective companies and is subject to compliance with the relevant legal procedures and obtaining regulatory approvals.
Yours faithfully,