Repsol YPF Announces 25% Reserves Reduction

Repsol YPF announced expected downward revisions in its proved reserves of 1,254 million BOE.

These revisions relate primarily to natural gas reserves. The majority are located in Bolivia (52%) and Argentina (41%), along with smaller amounts in Venezuela and elsewhere.

The revisions were mainly driven by changes in the applicable legal framework in Bolivia, due to the new Hydrocarbon Law and greater knowledge of certain fields in that country and Argentina.

The revisions are currently expected to result in an asset impairment charge of less than 50 million. Repsol YPF anticipates 2005 earnings to be consistent with results for the first three quarters.

Repsol YPF management has taken a number of steps in the past year to enhance reserves booking procedures, including the creation of an independent Reserves Control Group separated from the business units.

The Audit Committee was assigned last April the oversight responsibility for reserves control, with the Reserves Control Group reporting directly to the Audit Committee.

An independent review into the circumstances of the revisions is being conducted by the Audit Committee.


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