Q1 2021 Vista Oil & Gas SAB de CV Earnings Call
Ladies and gentlemen, please standby your vis vis the first quarter 2021 earnings webcast conference call will begin momentarily in about three minutes.
Thank you for your patience and please standby.
[music].
Ladies and gentlemen, thank you for standing by and welcome to the this is the first quarter 2021 earnings webcast conference call. At this time all participants are in a listen only mode. After the speaker's presentation. There will be the question and answer session to ask a question during the session you'll need the press star one of your telephone please be advised the.
Today's conference maybe recorded the requiring further assistance. Please press star Zero I would now like to turn the conference over to your speaker today, all of the Hamzah I'll turn the call strategic.
Strategic planning and Investor Relations Officer. Please go ahead.
Thanks. Good morning, everyone. We are happy to welcome you to eat that's the first quarter 2021 results conference call.
Here with me Gotta go to each of them, chairman and CEO and with bolt of without being there'll be the CFO.
Before we begin I would like to draw your attention to our cautionary statement on slide two.
Please be advised that our remarks today, including the answers to your questions may include forward looking statements.
Forward looking statements are subject to risks and uncertainties that could cause actual results to be materially different from expectations contemplated by these remarks.
All financial figures are stated in the U S dollars and of course that with international the financial reporting was done that I asked for it.
However, during this conference call, we may discuss certain non I got for his financial measures such as adjusted every day.
Reconciliations of these measures to the closest I got for its measure can be found in the earnings release that we issued yesterday.
Please check our website for further information.
Our company be the oil and gas he says well see that I'm. The only models I think they've got the thought about the out of the org.
Organized under the rest of Mexico, registering the way something that you kind of have I noticed in the New York stock exchange.
The decrease of our common stock I missed that in the worst havoc on oil I notice and be out of your stake in the New York stock exchange.
If you go off of warranty the T. W. O eight eight I.
I will now turn the call over the coming out.
Thanks, Alessandro and good morning, everyone and thank you for showing interest earning call.
Against the need to share with you our first quarter of 2021 resorts, which showed solid operational progress unprofitable growth and put us on track to the leader when a word of 2021 guidance.
The operational and financial metrics have improved both year on year and quarter on quarter.
Driving the need to get always our flat sheet crush of game because by the way the which continues to show improvement in the well costs improve D V D.
In Q1, 2021 we achieved a quarterly production record with Citi for once all of the same boe's per day, a 29% increase year on year.
Production was up 56 per cent year on year, and 15% sequentially boosted by the early dine, but the number of seats in the high by the way the at the beginning of February but number of separate in late March.
Total revenues were $116 million up 58 per cent beside the Q1 2020.
Most of these would even by the increase in oil production, but also by the improvement in the realized oil prices.
Lifting cost per view, he was $75 for the quarter and 24% the reduction year on year, reflecting low what incremental cost in the hired by the way the.
Which dilute our fixed cost base.
Adjusted EBITDA was $58 million and expansion of one country 31 per cent vis vis Q1, 'twenty 'twenty didn't even by the solid increase in revenues I mean to flood the lifting cost.
Capital expenditure was $78 million in language the execution of our 2021 guidance and reflecting the completion of two but in the high by the way the during the quarter.
Cash at the end of the period was one kind of $63 million in Q1, we saw strong cash flow from the operations, while making good progress in liability management.
The net debt stood at $386 million.
This week, we published our initial sustainability report.
An important milestone in Vista commitment to investing the principle of ESG in our strategy and developing our business in the sustainable way.
The report provides and nobody of you of our share of any to become a reliable low cost and low power company.
Windows. So also important ESG achievements to date later in the presentation.
Before we move to the detailed discussion of our results. It is important to recall that the COVID-19 pandemic.
It did impact in Latin America.
I would've beaten the contingency plan and our COVID-19 protocols are willing plays the shale and safety of all the employees and contractors will continue to be a priority for the company.
Now please turn to slide number four.
Total production during Q1 2021 was up 29% year on year.
And 11 for same quarter on quarter. This was there any sort of restarting of what are the reading of completion activities in Q3 2020.
Which enable us to diene Dwayne you was since that date.
U K site, we made the decision by accelerating of what are the billing plan with the second rig during Q4 2020.
This enable us to tie in but the number of seats in early February but number of seven in late March.
Setting the stage for a steady growth quarter on quarter.
The orange share of colored by the way the production is approximately 90%, which.
Which is why we have seen oil production, increasing by 56 per cent yet on the year on 50% quarter on quarter.
We achieved stable quarter on quarter gas production due to the addition of associated gas production from the new but encouraged by the way day.
Which offset the decline of our base production.
Total revenues in Q1 2021 out of one country 15 $9 million.
58% above Q1, 2020, driven by the increase in oil production I just mentioned.
Realized oil prices in Q1, 2021 was $45 $5 per bottle.
Per cent of both year on year.
Local sales contracts accounting for 54% of about what the total sales in Q1, where the close in November of last year, when Brent was trading in the 40% to $45 range.
The <unk> has been two wheel sales book early on too.
<unk> revenues and fund investment activities.
Sales to export market the accounted for the remaining 46 per cent of the volumes we contract sign.
When Brent was trading in the 50 $55 range we.
We continue to see pricing of our export oil discounts to Brent of less than $2 per lot of it.
Q2 sales, we mix of domestic and export volumes have already been contracted with a realized oil price of approximately $53 per Nevada.
So a lot of your gas pricing has decreased 9% year on year to.
<unk> goal as per the media and with you in.
The prices dropped from $2 per million of it here in Q1 2022 one.
$2 per million Btu in Q1 2021.
This was partially offset by planned gas price of $2 $7 per million Btu, which up to that is true volume sold to the distribution companies and power generation.
In Q1, 2021, we continue to reduce our total lifting cost per about it.
Did you did buy the production increasing because by the way.
Low incremental lifting costs.
We were below the Evo a lot of part of the UAE market for the first time with $7 $5 per day.
For the quarter.
He has put us on track to the lever when our 2021 guidance.
Moving to slide seven of adjusted EBITDA for the quarter was the solid $58 3 million, a 131 per cent increase year on year and a sequential increase of 62 per cent.
This reflects higher revenues on our successful efforts to optimize of course.
Adjusted EBITDA margin was 50%, reflecting an improvement of five percentage points, what are the one quarter and 60% points year on year.
These margin was achieved at the realized oil price of $45 $5 Bye bye.
Thus, we forecast if part of the margin expansion in the next quarter due to higher realization prices.
Yeah.
I wouldn't it back for the quarter was $19, but of the UE.
$8 $5, but of the UAE above Q1, 2020 on almost doubling year on year.
These growth driven by higher revenues, but of the UAE due to an increase in the oil mix in our production and improved oil prices as well as of course optimizations.
Cash flow from operating activities in Q1, 2021 shows a sequential increase of 35% of 74% year on year for a total of $36 6 million.
This reflects an increase in cash flow generation, driven mainly by higher adjusted EBITDA.
Cash flow from investing activities was $80 million in language capex activity of $78 1 million.
Approximately 90% of these embankment was deployed in bajada del Palo Este.
In March 2021, we successfully raised the basically key building of $75 million in out of <unk> capital markets.
Proceeds were used to replace the depth with shorter duration of higher coupons.
The average life of our financial debt increased from one eight to two two years.
We issue a $42 million of facilities in pesos Dora linked.
In the years with the.
For 25% coupon on it.
$33 million of facility in basis.
The inflation adjusted.
In three five years.
The 273% coupon.
Yeah.
I will now share on an update of our development in <unk> by the weighted.
Where we continued to achieve significant improvements in well cost and productivity.
But the number of seven which was day in late March recorded as really in completion cost per well of $9 5 million for.
45% improvement since our first spot.
This reflects a solid level of improve.
Our investment in technology and the of any seat of the one team operating model. We set up we thought what are the key contractors.
Did you didn't beat has improved to 70 days per well down from 35 days in our first pad.
Completion of course, he is down 50% to $110000 per stage from 220000 per stage in our first but the reflecting improved completion design.
Streamline the sheet Geek.
The context for the water on some sourcing.
In terms of the DVT, our wells continued to perform about what type of crude.
For the first one kind of the 80 days was out of 22% of about a quarter.
On the longer period, we are also seeing robust performance the troops.
But that's kind of more than 360 days of production history of performing 15% of all the tight crews.
The channel on the bottom of ride shows our total share of production since we started out of I hired by the way of development and the <unk> date of each but Ah.
As shown the activity ramp up in Q3 2020.
He's driving our production increase the elderly dying of but number of seek a consequence of the accelerating with two rigs in Q4 2020 is paying off.
Potential production grew 21 1000 Boe's per day in March.
Such as the Asian also enable the dying of Pud number of seven late in the quarter, which is already contributing to a per you put election.
Solid performance weighted cost of umbrella of DVT have reduced our weighted.
<unk> development growth to approximately $7 per lot of it.
Okay.
At Vista, we are committed to advancing our sustainability business practices and.
And then devoted to the right in vitamin on social impact with our company and in communities, which we operate.
Last year we.
We accelerated the rollout of our sustainability program.
In board among other things beauty Dicey ESG focus areas that are most of my T really align well with the business and key stakeholders.
They go into the structure were sorts of trends.
And our ESG program is now overseen by the corporate practice Committee of the company Board of directors.
We are now ready to set the lot of height with a commitment to transparency by showing our progress on ESG matters.
We selected <unk>.
For the primary comprehensive disclosure of <unk>.
ESG matters.
That would be for the industry specific topics more relevant to our financials, but of format and long term value creation.
We moved for with dangerous part of what disclosure of against these and another level.
The live on the standard.
In 2020, we announced our support for the 10 principles of the United Nations Global compact.
With the commitment to report on the progress of our strategy culture and day to day operations are contributing to the UN compact adcs.
Additionally, we are focusing on a U N Dcs for 20, <unk>, where we believe we will be cash the greatest impact. This can be seen on the right hand side of the slide.
A key global issue is climate change and use of reverse.
Imperative across all industries.
We know that we have of critical role to play within the energy transition of handset.
I know oil and gas company.
As such our goal is to become a reliable producer of affordable and increasingly low kind of one energy company.
In 2020, we achieved an important milestone towards the scores by that the the mining our effort in the light clothing sales of scope, one and the scope two emissions.
We are now working on setting corporate of reduction goes and the signing of an action plan for reopening of submissions you know what operations in the short medium and long term.
We presented in our next sustainability report.
I am also proud of our safety track record of since we took over the operation of the assets in 2018.
This has been achieved by.
By implementing a culture of learning and always beauty Deicing safety as the bedrock of how we operate.
Also by aligning our practices with the guidelines.
Set by International net association of oil and gas the reduce it operating management system.
Yeah.
In the slide 11, we highlight the key ESG metrics are what keep the Mustang Vista progress on each of material commitment.
First as noted we have set the basis for establishing the emission reduction goals by having established a worry she HG inventory for 2019 and 2020.
In 2020 scope, one and scope two emissions amounted.
Two 470000 tons of C of true Q on it.
In our operations, 99% of our hydro Carnival is the imported by <unk> lives and we use 70% of some boxes to minimize the amount of silica in the air.
Throughout this period, we have beauty dies, the hell out of safety of our employees and contractors with focus on our ambitious goal, we set out a few years of singles.
Reaching the IATA in line with the other one international oil and gas companies.
You got out of IATA for 2020 was 0.3 38 of 90% improvement since we took over at these operations.
I am, particularly proud of the progress we made against our commitment to the U N. A the she goes of shifted equality.
In 2000 2050 per cent of our new hires were agreement, which is well ahead of historical hiding the diversity right.
We made contributions to the progress of would've been in the communities, where we operate.
Particularly considering the hardship expedience as the result of the COVID-19 pandemic.
Importantly, our entire organization is aligned with the ESG.
Which country per cent of our employees show the team incentive compensation, including a relevant component of assistant ability goes.
The focus instead on ethics, and independent and the government has reinforced our ability to execute on our strategic objectives.
To ensure we continue to achieve over the wall. The key role of some functions are in place two of three.
Yes, she governance, unsecure oversight and accountability for our sustainability issues and objectives.
Moving on to Slide 12, I will discuss our progress with respect to 2021 guidance.
Well the annualized work program for <unk> by the way they sort of talk to the lever of 16, new with Guyana during the year.
We have diene total west impact number of seek in February and another for west in putting up out of seven in late March.
But number of day with for additional waste is already the leader and is currently waiting for the completion.
Production is showing a steady growth having increased 11% quarter on quarter. They put a full month of all of what about kind of it by the way the development on the recent dying by number of seven which should provide another step increase the forecasted to leave us on track to the lever between 37 of its 88000 Boe's per day in.
2021.
Previews of showing you think of decrease to seven five dollar type of UAE in Q1 in language guidance adjusted EBITDA in Q1, 2021 was the strong and according to guidance.
We gained our first two but I look in oil prices for Q2 of all the $45 per bottle of the guidance.
Boondocks from trucks to finish the first half of the year head of the items.
Capex in Q1 was executed as per hour Unlike water program.
<unk> is in line with guidance.
Finally, gross debt has increased marginally due to COVID-19 market insurance during much of the proceeds of which were used to kind of said short term debt in April.
In summary, we have made solid progress during Q1, and we are well positioned to deliver on 2021 guidance.
To finalize this call and before we move to Q&A I will recap of onto the headlights.
In Q1, 2021, we have seen of solid recovery.
The operational and financial metrics adjusted EBITDA was very solid at $58 million with the margin of 50% of realized oil prices of $45 per bottle.
We see part of their appetite is margin in Q2, having looking out of Q2 sales prices either owned $53 per Nevada.
But kind of by the way the continues to show improvement in drilling and completion cost we probe DVT of all types.
<unk> got lower back.
The development cost for approximately $7 per about it.
In terms of cash in Q1 2021, we saw a solid increase in cash flow from operations also we successfully tapped.
The capital market to reduce cash interest expense.
And then the average duration of our debt free.
Maintaining our balance sheet.
Yeah.
Sustainability is vital to our business strategy and I am confident we have the right people process commitment and accountability structure in place to advance our role in soybean the complex and then of sheet and in vitamin challenges, we all face.
In this context, we have publish I wouldnt I know the.
2020 sustainability report.
We the scope one and two.
She achieved emissions deadline that the established during 2021, we've said corporate goals with respect to short medium and long term production of Greens call emissions in our operations that would be the day in our next system the ability of report.
Finally as discussed in the previous light where solid interact to the Liberty our 2021 guidance.
Before we move to Q&A section I would like to thank our investors for their continued support.
All of the team at Vista for the area.
Sure the hard work and commitment.
And we got the operator, please open the line for the Q&A.
Thank you as a reminder, the ask a question you will need to press star one on your telephone.
Part of your question first of the Alky. Please standby, while we compile the Q&A roster.
Our first question comes from Bruno Montanari with Morgan Stanley You May proceed with your question.
Good morning, everyone. Thanks for taking the question.
To see the the continued evolution band by band.
Very impressive.
However.
A couple of questions here first on pricing.
What's your view on oil.
Oil prices in Argentina can converge.
For the international benchmark, even with the the $53 of locked in for for Q2, the discount is still fairly large versus the spot range right.
And then also get your views on whether I'm.
One of the believes that natural gas and incentive scheme is going to work properly.
I'm around.
My second question is more long term.
And taking into consideration of the experian.
You have had now with seven beds are getting into the net number right now if all of the stars aligned and the.
The the reservoir response is positive.
How low can lifting cost be and how long can your drilling completion costs. The I'm not talking about the next quarter or a year, but philosophically.
Just looking at the potential of the assets.
Where would the wood cost in drilling and completion of Boston. Thank you very much.
Hi, Bruno on thank you very much for your question a good one that's always look.
Look at the starting with pricing I think.
First of all we need to.
We need to keep in mind, the but I see in Argentina have.
Two of the fin effects.
The fed effect when we talk about export price is is the fact that the we are pre selling our volumes ahead of time.
We are doing because we are securing the revenue but also because.
The way that the market in Argentina, the local market. The work is we believe that the every time that we say Q of volumes in the local market. We pre bought more use for for the 14th so when the refinery feel that they are.
Well supply.
They don't gross I would importation.
So that the fact that we have to keep it in mind.
So then is important too.
To define what except for the body, so you're talking about for the brand.
Really our market this export of body and therefore the.
But at the Argentina is used to be but in below 12%.
The new to the new regulation today is Brent minus 8%.
And also you've got to add to that the discount.
On the commercial volume isn't that in Q2 2020 used to be below $10 and two day is $2. So as an example, if we take two day vein of 61 and you discussed two dollar of commercial discount you'll go into 59 on the.
That should take a percent you adding 54.
So that is the per body that we have if you would take a picture.
Of course to date.
Prices out of bromine.
Hello.
The day to day bump of Ics that you know.
If oil on during the time.
We got a half bump for Ice's data of all with poor body instead of at the moment and now we have on price.
Price that is below import parity I would say the if your day to day, probably we are a true $3 below import parity.
As I mentioned before but I've seen that Argentina bump prices of caffeine notice here.
He noticed that to go down we have never seen going down and the nurse has to go up.
So that is the is the is the name of the game here.
In terms of in the Mcgough.
But.
We said the first of all for beta.
When you look at our top line our revenues.
The revenue coming from gas is learned of less than 10%. So is is not really meaningful for us to date.
Two years ago by the us as we become a company that is more oily as we develop on the unconventional resources.
Having the Lake city impact.
I do believe the big assets scheme that they put in place it makes sense for the government because everybody.
Every time that they don't have local supply they've got to import.
The David even for range of course is big.
We see companies the out of place.
Oh, but I got the resources.
With these new scheme.
Speaking of TBD. So my view on that is that is in place and I think is going to work.
In terms of more your philosophical or a long term question.
What is very interesting and of course, we have a view, even though I cannot give you a.
But the size of numbers.
Otherwise.
We'd be we'd be disclosing something that they'll have to disclose yet but do.
Do we believe we can really in the lifting gross arena.
Net of foreign below seven lifting globally, we have mainly two effect as we develop more unconventional as us.
We're going to continue growing production the out of Florida and the new.
The network part of our feet gross.
And knowing that the con.
We know that the.
Montana is y.
The <unk> wise.
Our unconventional is of lower lifting cost of operation compare I would.
Our conventional operations so how should we add more volume we dilute the gross as we add more unconventional ways with the lifting cost. So I think we can we come dream of being was below.
$7 per about it.
In terms of drilling and completion cost.
<unk> also seen a we've done with Dennis back at some point of time to to be below seven and I've seen the area.
Two effects one of if it is clear that we are performing above.
Our type curve of today.
The.
We've been performing about the already for the white, So I don't see that changing on the on the other thing that we believe we can do if we could continue.
But have you seen.
More than drilling costs I mean, we.
I am not sure we can drill the fact that we are leading today.
But on the completion side.
I think we are still having the sort of proves that we can.
We can reduce their cost of one example could be the proppant.
As you know, we have and the strategy to source.
In base.
The Sun.
And we are we are developing that in order to have an impact in the component.
It really meaningful to our completion cost so.
<unk>.
The answer is yes, I think we come we come we come think of being well below the numbers that we are a two day for getting to the end of the year is going to take time, and it's going to take out of work, but I think we have the strategy of who has the people to do it.
Right very clear thank them again.
Thank you I don't know.
Thank you for our next question comes from Andres Cardona with Citigroup. You May proceed with your question.
Yeah. Thank you good morning, and good Alejandro.
I have a couple of questions. My first one it's fully with the.
The previous questions about realization prices I would like to understand if the recent progress with the either low carbon low and if you kind of let us know how much of your production was exported during the first quarter and if you can give us some color for for the second Q.
And then the second question is if you come help us soon the Sun what is the situation between the unions and the oil and gas industry it become more of the.
If you have seen any impact you had your operations.
Thank you Andre for your question so so.
So I will start first with the export.
On the building up of them on Bruno's question. So in Q1.
The percentage of export was 46%.
So we have the mix again of the local market.
On volumes that we close in Q4.
2024.
For export and that volume that we saw was <unk> 46 per cent.
In Q2.
Of course, we have the vary a.
Bet that'll be to the lithium I'm better prices from the local market. We apply the finished the sheet.
We are the component on the local market, where 75% for local and 25% for airport.
On the.
A few as I mentioned in the presentation.
He is already on the bulk of it.
But to what Bruno said I mean, if you look at.
If you.
Looking now us.
Blood, where we usually follow.
The average sell prices in the local market on dividend both for waterproof.
If you if you if you guys have made that clear from Shanghai to AT&T want to June 'twenty, one you will see.
How do you see net of share that Amy Imation.
And you see the gap between it but on low cut prices narrow it down.
The GAAP is still there and part of the.
Back again for body and the commercial discount that we have that also.
With the government.
And the channel discount.
<unk> has been the use of a lot of I mean, we have turned into sort of a $1 two day and we are average $2 Oh.
Of our commercial discount.
In terms of.
The bulk of the week of AR due to the.
Uh huh.
Due to the social demonstration.
So first I want you said that we have no impact on production beat desktop knowing back on production.
We managed to navigate the issue extremely wet.
The social demonstration was driven by.
By head of water case.
Did affect drilling and completion activity, yes, because there was we were mobilizing of drilling rig from one but two other and that was affected because.
There was many road blockage on I would say it.
<unk>.
Yes.
I always said this is true they look like.
All of them already sold.
Nothing something that we have to watch something the weird of Costa in two of them not only for the one that we had a couple of about eight in Argentina, but also in another part of the work.
It's something that we need from the we've got to the wheat.
Hopefully we see these are normalizing in the next few days the herd.
To kick off our chief and that could even kind of arrive at an agreement with the provincial government. So we.
We see the issue.
Probably the soybean now or in the next few days.
Related to the hydro Kai warn low.
The initiative is still alive.
There's a lot of discussions between the of all of them and then on.
And the company's.
Like I've said before I think the important theme, we have a low the oil.
Oil and gas low that considered unconventional of is working so I think the main 0.2 of the rest they ought to use if we see any change in the fog.
Are we.
And the scheme will make our need for cross border there.
But the the Asian of deviance of for the people of investing in Argentina, and the other the main thing to consider the if you were going to have.
A lot of the team when they come.
Commodity regimen.
Israeli day to export.
We have more volume to export.
They are out of a we'd become the Vietnam.
Argentina.
The Seinfeld and been more of the capital will be of the of the local pricing.
Is what makes sense for Argentina, because he is going to create an inflow of dollar to Argentina economy that is exactly what the economy need so the.
Incentive out yet for the in anything that they can do in these in this bill to incentive I guess.
<unk> is really the name of the game.
I cannot say more than that day.
Just out of the topics on the the discussions are ongoing.
Think of them again on COVID-19.
The relations for for the results.
Thank you and the rest for the question.
Thank you. Our next question comes from Alejandro Demichelis with any of your Securities. You May proceed with your question.
Yes, good morning, gentlemen, a couple of questions just as a follow up too.
<unk> was 30 million of alone the impact of the of the social demonstrations.
So you were talking about some impact on drilling and completions. So can we see an impact on your next Bob kind of Cancun.
But kind of move to the next quarter. That's the first question and then the second question is.
I think in previous calls you will kind of targeting almost one part but for.
Quarter is that still the plan going forward.
Okay.
Alexandra. Thank you for the question, Yes, I mean, so far we see no impact.
When I said that the week of.
Basically.
Loose some time on the demobilization of mobilization of the drilling rig from one bucket to the other.
That's the Israel, Nevertheless, what I forget the drilling wise, so we don't see impact on our plan.
So again everybody seems the.
Shows that the situation. After the agreement is none of my lysine. So we are not forecasting any impact on production.
We continue with the same plan of divesting, one, but it kind of quarter.
We also are leaving us room to.
To create the or to accelerate our 'twenty to 'twenty two plan.
Yeah.
We've got the Boonies Q4, even to pick out one more Rick but this is not in our plan, but it's something that we have in mind.
Okay.
As to kind of closed up I think in your 2021 guidance you were saying the plan was to tie in 16 wells you already tightening eight you'll have for ready true two huge be complete the anti.
So it seems that you call the <unk>.
Whole of the second half to tie in.
Only for well.
And we see more wells being tied into the second half of the of it.
Yes, so we have taken eight.
We are going to day, another reporting Q are true.
Yes, you said in this.
Second Cup without for more to date.
The.
Congress.
For more of in Q4, yes, we could kind of we diene dosing Q on Q for it yes, we could.
Kind of caffeine back in in 2021.
Mike.
Okay.
Yes.
That's clear, but it seems that you are well ahead of the guidance of at least one of the drilling and completion.
Yes, we are.
That's great. Thank you.
Right.
Thank you. Our next question comes from Ezequiel Fernandez with balance you May proceed with your question.
Good morning to everybody.
Thank you for the very complete materials and congratulations on the progress in Bajada del Palo <unk>.
The most of my questions have been already answered.
Only one.
And I would like to stress on maybe related to EMEA was commenting on the new hydrocarbon flow.
In early April the government issue, the FX regulations, which are not new.
But the day reinforce the notion that exporting companies.
We'll have greater flexibility in accessing the official affect the market for debt repayment and dividends I'm talking about Deanna woo of human the momentum, but it's young but I just wanted to ask the honest.
I was wondering if this particular alleged legislation impacts your <unk>.
Financial strategy.
And if you're thinking about potential dividends.
Uh huh.
Thank you for Gil for the question and the answer is no I mean, we are not planning to use the mall too.
But the <unk> bonds.
The dollar is that the we need we already brought it before that the regulation was in place.
Not visibility that we're going to bring any more of the LSE.
Okay.
This year.
As you know you see of you follow us and you'll see our cash flow of generation and balance sheet, we are starting to generate cash.
And that now is going to be as we continue with our plan.
Something you will do so no we have no plans to use the mood control reported even to us to use that.
Okay.
Great. Thank you very much.
Yeah.
Thank you. Our next question comes from Frank Mcgann with Bank of America. You May proceed with your question.
Hi, good morning, most of the questions of have been already asked but just maybe the follow up a little bit on some of the other comments that you've made.
<unk> your activity. This year is it's fairly clear as you look into 2022, what what are your thoughts in terms of where you'll be focused.
Okay.
Hi, Frank.
Thank you for the question. So 2022, we will basically have we will continue so far of our view is the we'll continue with the strategy of drill to fill.
<unk>.
The did you feel mode.
With the cabinets better capacity in an hour of facilities with minimal Capex investment.
To go.
All the way to $45 50000 barrel oil per day. So the strategy will be continue this continue to be the same that the thought that you would need us.
Create the company that in 2022.
Shannon Day day low cash when you look at $45 of studies of the plan that we have two day.
We're lifting cost of seven on our.
Development costs of seven led boots, so we have become a low gross.
And low cost producer that clearly cash.
<unk> of 50%.
The low oil prices.
So 2022 will be will be a year, where we are going to be of all.
Now the cash flow growth.
We will have to decide what we do that the cash that we shouldn't at eight of core of the option to accelerate the development of the associates that we have done a huge is an option but of course, we have another option something that we are the two that the strategy is that now we don't want to be only low cost we want to be a low.
Carnival and operator on the.
I'm, not saying that in the mode of fashion we.
We are really putting this plan of assistant the ability and we believe that the week of the agility of the team and the power to become a low carnival.
You said.
Of course, our unconventional development.
The sculpin and the lifting cost is kind of been in the low kind of was well because our operation today.
Of unconventional is probably in kilogram per see a true cost.
Of all of the CEO of that cut the Seo to emission that our.
Our conventional.
The operation. So that is another objective that we have and I've seen that objective, we've got to realize between now and 2020 'twenty two but the 2022 with two day oil prices.
It looks very bright for Vista.
Okay, great. Thank you very much.
Thank you and as a reminder to ask the question you will need to press star one of your telephone. Our next question comes from where some of the marrow with credit Suisse. You May proceed with your question.
Good morning, everyone. Thank you very much for taking the questions and congratulations on the results and also on the achievements on the ESG from.
My questions were most of the yields those routes of before.
Just a quick follow up question from Oh, the production of the topics.
For.
So could you share the students for dozens of view in the first quarter was for the 100 per risk the growing all the way up.
Plenty of warm thousands of for March.
But the <unk> 2021 guidance of 37 per route.
Great that's 40.
I mean could you provide us some color for the when do you expect to start in the order of wells.
Instead of crude.
More wells than the plane and the.
Or how should we see a reduction of the walking through the year.
The good production growth even further than the guidance.
Very much growth.
So do you want to set up for the question so yeah.
Yes, I mean.
The fact that we are performing above our guidance of two day.
When you look at production on also for what we are seeing of the performance of Q2.
But of election today of these days is about 40000 barrel per day when you take the picture of today I think it's 40 city. So we are performing about guidance.
Nevertheless.
We have the scaffold the ear to rule.
The activity that we plan is still the same so we are talking about the potential.
But in Q4, but the reality is that but is not in the plan and the fee. We have that bundle of the plan is going to have minimal impact on production.
More of.
The important for 2022, because it's going to create is going to kill us to have a much better starting point.
Something that we did this year and they think is important.
Nevertheless for the guidance of 2021, it will make no difference.
No.
If you we we all know about guidance, how we finished the year, we pretty much depends that the quality and the timing of the bad debt are coming in.
Uh huh.
Q2, and the one that we are going to study in Q3.
Come in place with the quality that we discussed but the the short answer to yes, we're performing.
The production wise about guidance so far.
Alright, Thank you very much Richard.
Thank you and I'm not showing any further questions. At this time I would now like to turn the call back over to Magellan the Lucia for any further remarks.
Okay.
<unk>. Thank you very much for your question on the continued support.
I wish you are all healthy and well.
Sure a good day, thank you very much.
Okay.
Thank you ladies and gentlemen. This concludes today's conference call. Thank you for participating you may now disconnect.
Okay.
Okay.
Okay.
Yes.
Yes.
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