Q2 2021 Vista Oil & Gas SAB de CV Earnings Call

[music].

Ladies and gentlemen, your conference calls go to the stock.

Momentarily. Please continue to standby and thank you for your patience.

[music].

Good day, and thank you for standing by and welcome to the Vista second quarter 2.

2021 results conference call at this time, all participants are in a listen only mode. After the speaker's presentation. There will be a question and answer session to ask a question. During the session you will need to press star 1 on your telephone. Please be advised that today's conference is being recorded if you require.

And your further assistance. Please press star Zero and I would now like to hand, the conference over to your speakers a day Alejandro chat and Yaacov. Please go ahead.

Thanks, and good morning, everyone. We are happy to welcome you to Vista second quarter 2021 results Conference call.

And I'm here with me.

It won't be <unk>, chairman and CEO, Pablo it up and Tobey CFO and Guangzhou with gas.

Before we begin I would like to draw your attention to our cautionary statement on slide 2.

Please be advised that our remarks today, including the answers to your questions may include forward looking statements. These forward.

And looking statements are subject to risks and uncertainties that could cause actual results to be materially different from expectations contemplated by these remarks.

Our financial figures are stated in U S dollars and in accordance with international financial reporting standards I FRS.

During this conference call, we may discuss certain non <unk> financial.

Hi, guys, good such as adjusted EBITDA.

Reconciliations of these measures to the closest I got price measures can be found in the earnings release that we issued yesterday. Please check our website for further information.

Our company with oil and gas he said Sophia and not even I would've thought he'd like upset about yodlee organized under the laws of Mexico.

And he kind of oil.

<unk> and the New York Stock exchange.

And you guys have a common stock out of beta and their all time and he cannot myeloid and be a USD and day, New York stock exchange basically cut off our Warren East.

The PW 4 or 8.8.

I'll now turn the call over to Miguel.

Thanks, and good morning, everyone and thank you for showing.

And the settlement.

I am delighted to share with you our results of the second quarter of 2021 day.

And which we have obtained understanding attainment across all key operation and financial metrics.

We made good progress with respect to our 2021 guidance on the back of a.

And I noticed execution and that drilling and completion basis and back highlighted by the way that day.

Q2, 2021 we'll start with reported comps safety this quarter.

Total production and growth achieving a record of $39 <unk> per day.

If you'd like.

Strong revenue increase.

Already yet oil.

Production was up 1 country, 1% year over year, and 19% sequentially boosted by the time of patent number 7 and because by the weighted in March.

It is fair to say that Q2.2020 is local.

Low comparison base, even the production shut in and respond to the drop in demand due to the Covid pandemic. This comment applies to most metrics compare on the index and motivated.

Total revenue and a $165 million with.

With tripling revenues year already.

But also that a phone globally, what are the little quarter, mostly driven by the increase in oil.

<unk> and stronger net realized oil prices.

Okay side, we've made a good decision to ramp up activity in late Q3 last year. So we are now capturing.

Gross.

And also kind of stronger production base.

This can cost per Boe.

Was $7.3 per quarter.

Simple standard adoption you had a late again, reflecting lower incremental cost in bajada, Palo Este, which continued.

Our fixed cost base.

Adjusted EBITDA was $102 million competing and it's got an important and our performance and achieving 62% adjusted EBITDA margin.

Capital expenditure.

Expenditure for the quarter was $75 million.

And with the execution of our 2021 guidance.

And reflecting the completion of our credit but for the year in Bajada Palo Este.

During Q2, 2021, which generate positive free cash flow driven by our robust cash flow from operation and making good progress and I am really did management cash.

And at the end of the period.

Items was $237 million net.

Net debt stood at $368 million.

We will now deep dive into the main operational and financial metrics. So please turn to slide 4.

Total production during Q2, 2021 with subs.

Up 67% year over year, and 17 for the same quarter over quarter.

Waste through the year you can leave US ahead of our regional 2021 guidance.

And election and growth was driven by our flagship development and.

Evaluate.

But.

And in March.

Given the high share of oil and the development, we see greater impact in the oil production metrics, which increased 1 country, 1 per se, yet already yet and 19% quarter over quarter.

During Q2, 2021 we executed and Workover.

And the projects into gas plays.

Which drew a gas production increase of 10 per same quarter over quarter, and pipers and yet over the year, allowing us to comply with our blood and gas commitment.

Total revenues in Q2.2000.

21 were at a $165.3 million.

Yeah. So non increase you had a weighted yet having doubled both production and realized prices.

Sequentially total revenue increased by 43 per cent driven by net even after the election and generated by day diene patent number 7.

And on triad and oil and gas prices.

Our light oil price in Q2, 2021 was $54.9 per barrel up 197% you had already yet and 21 per cent whatever over the quarter.

And they will make the market accounted for 83%.

And for total sales in Q2, 2021, reflecting an improvement in domestic crude oil price to the $54.55 per barrel range.

Sales to export market accounted for the remaining 70% of oil volumes.

With a contra.

<unk> signed 1 brand and was trading around $63 per barrel.

And we still see pricing of export oil with discounts to brand of late and $2 per barrel.

We are continuing with our strategy of building a sales look early on to lock in revenues and fund investment activity.

And.

Most of our Q3 sales with a mix of domestic and export volumes have already been looking at an average realized price of approximately $56 per volume.

Realized gas prices and increased 59% you had already yet Q3.

Covid dollar per million Btu boosted by the planning and gas winter price of $4.1 per million Btu applicability to approximately 60% of our total volumes starting may 2021 <unk>.

Additionally, industry price increase from the $1.9 per million.

Fight you linked through to 2022 free, though and ask them to get with you in Q2.2021.

Moving to slide 6.

We see our continuous improvement and Denmark lifting cost per <unk>.

Total lifting cost per the quarter was $26.5 million.

Partially driven by increase in oil field activity, but also by the impact of a stronger peso and our operating context.

We have seen the screen and FX and the bus and they always have a minor impact and our total cost.

They get off on the right shows.

Those are the production increase and because by the way day.

Continues to absorb our fixed cost base and driving it is actually a pretty poor same quarter over quarter to $7.3.

And Q2, 2021 adjusted EBITDA stood at $102.

And <unk>.

This implies and expansion of 19 year over year.

75% and grow quarter over quarter, reflecting the boost in revenues as described earlier and lower lifting cost per <unk>.

Adjusted EBITDA margin was 62%.

3 and an improvement of 12 percentage points quarter over quarter and <unk>.

And 42 percentage points year over year.

And make back for the quarter was $28.2 per Boe $90 per the urea and <unk>.

Q1, 2021 as day will cost.

And allow.

Allow us to capture the full increase and realized price.

Moving to our financial situations, which I believe is socially.

In light of this quarter, we were free cash flow positive having generated and he said.

$35.5 million and Q2.2021 with a capex level.

Level of $85 million.

Cash flow from operating activities in Q2, 2021 shows a sequential increase.

270 per cent for a total of $116 million.

This reflects.

And Greece and cash flow generation.

Good evening.

Mainly by higher revenues.

Cash flow from investing activities was $80.5 million in line with Capex activities was $74.6 million.

Approximately 85% of the investment was deployed in Bajada del Palo Este.

Cash flow from financing activities was $37.8 million.

During Q2, 2021, we repaid a total of $36 million and bank loan and Shun, we successfully raised the peso equivalent of 7 day.

And 1.4 million.

In Argentina and capital market.

We issued $38.8 million bond and peso us dollar and link you and 2 years with a 4% coupon.

Additionally, a $32.6 million bond and peso inflation adjusted due in 3.

And 5 years with a coupon of 4 per cent.

Additionally, during July we were.

We'll draw $24 million upfront available credit line with local banks.

Discussed race with new debt is being fully utilized to repay all day.

Points, we have already repaid $45 million corresponding to our top tag along and we will repay $50 million corresponding to our Cds 1 zone.

Under these assumptions total depth.

Our second is forecasted at $534 million.

Net which is $16 million lower and Q1.2021.

Our increasingly strong operating and financial performance during the last quarter has led to progressive non manifestation of financial ratios.

Negatively impacted 1 year ago.

Lockdown restrictions sustained crude oil prices and sales volumes.

And Q2.2021 net leverage ratio was 1.7 times adjusted EBITDA.

Based on our plans for the next 2 quarter, we are forecasting and net leverage ratio of approximately 1.1 times.

And the EBITDA by year end.

Our flagship development and <unk> to continue to drive growth.

The chart on the left of slide 9 shows our total share production and we started this per ship.

And the time and date of each part.

The timing of patent number 7 and then of the previous quarter boosted share production in Q2.2021.

But 8 landed 2 words and legacy net and true width and the organic growth.

And with an average lateral length of approximately 2006 hundred meters and <unk>.

<unk> 50.

For average frac stages per well.

Normalized drilling and completion cost per well was $9.5 million.

In line with our previous path.

We are currently finishing drilling a 4 well pad and number 9 which will completed and tied in in late Q3.

I will now share a summary of our business development activity and.

And Sean to NPA.

And we signed I mean, betterment and agreement with Duffy.

For the short and development of a fight but.

Well, each and the colored by the way.

The price paid by therapy water the $5 million per.

Pack, which equate to $55000 acreage.

They are working interest.

And setbacks.

And 80% to Vista, and 20% with Trafigura.

And with each partner net of pain, it's share avoid capex and receiving pro rata production.

Lastly, we paid <unk> and operator fee.

Oil <unk> and indirect costs associated with.

Production.

Vista remain 100% type day call net of the conversation and operator of the block.

Previously we have sold.

And meaning 10% of the coding and amount of US who is the compensation per share for $21.5 million.

And play valuation was about 13, south and Golar package, which is 1 of the highest multiples for a concession in brick and mortar history.

This has a strong strategic rationale.

Our.

Profit in.

Improve our financial position and further allow.

Moving to accelerated here.

And by the way.

Also focusing our capital and team on our core project with diverse economic allow us to share at a higher return at the consolidated.

And at 18 level.

Finally, with Trafigura and strengthen the relationship with our key domestic offtake it and 1 for the most important crude oil traded at a global level as well as bringing in new player into a commodity oxy.

I will now review.

And update on ESG matters, while we have made good progress to reduce greenhouse emissions in our operations.

As expected in our previous call. During Q1, we finished the study will determine our base <unk> emissions.

We recovered its scope 1 and scope.

<unk> emissions, providing granularity.

The absolute level, and even defining and may offenders.

This milestone was a significant achievement and laying the foundation for and actually never emission reduction plan.

We are currently working on such a plan, which will be this close and our Mexican liability reported.

This plan.

Plan with sit short and medium and long term corporation and production growth consistent with 2015 Paris agreement.

And Q2, we approved a plan for 2021, which will allow us to reduce 100% of the new emissions generated by the incremental production embedded.

2021 activity oil program.

This plan is being executed and is forecasted to lead to a 30% reduction year over year and emission intensity down to approximately 29 kilograms of cotwo and better really.

Sustainability is detailed.

Through our business and strategy.

And I am confident we are taking the price deck to becoming a leading low cost and increasingly and low carbon energy producer.

We made further progress regarding our commitment to gender equality and the first semester of 2021, 58% of.

And our new high and were women and.

Improvement compared with a 50% and achieved in 2020.

Finally, we have continued to support social investment and the town of Cottrell Rio <expletive>. We have finished the first phase of a bicycle line project that will fit 8 kilometers.

And of our we have also assigned company premises and capital to reduce our SEC Covid vaccination Center.

Moving to slide 12, and we present, our updated guidance for the year, reflecting improved performance and vis vis the original plan.

With operational and skin <unk>.

Whereas in Bajada Palo Este for 2021, we have already <unk> 12 of such with.

And we have accordingly, really and the last well of the 4 pack, which will be completed during Q3.

We have added 5.

2 the annualized work for them, we will be drilling during Q3 and.

Completed during Q4.

The rationale behind this decision is that we have and robust balance sheet. Thanks to the higher production rate.

The realized price and lower development costs.

Which allow us to add further activity with our Lucy and capital discipline and prepared us for them.

The new loans status in 2022.

We are updating our production guidance and a range of 37% and 38000 Boe's per day.

And to a range of 38% to 39 sales and Boe's per day.

And as forecasted increase is driven by faster drilling and completion.

And with Keith's, enabling earlier Italians in Bajada del Palo Este.

Capex with our expected and work through DVT and.

And to our leases 10, and the contribution of the fleet, but at the end of the year.

Lifting cost guidance has been revised from less than $8.

And the UAE to approximately $7.5 per per year.

Q1, and Q2 came in at 7.5 and $7.3 per <unk>, respectively.

And we forecast to remain within the range and Q3 and Q4.

The incremental production continues.

Used to absorb our fixed cost base.

We are revising upwards, our adjusted EBITDA guidance from $275 million.

$2.325 million.

Adjusted EBITDA has been positively impacted by the additional production.

But higher realization prices in Q2, and Q3, 2021 and lower lifting cost per day.

Based on the acceleration of our <unk> pilot development, we're increasing our capex guidance from 275 million to $310 million.

Looking at they get up.

<unk> the bottom left it is clear that we are not allocating the entire and increase in adjusted EBITDA and capital expenditure free, forcing our commitment to capital discipline.

Finally, we are maintaining our guidance for gross debt of approximately $500 million.

And now and guidance.

And for our net leverage ratio, which is forecasted at approximately 1.1 times adjusted EBITDA.

And of the year.

Clearly marked the successful execution of our de leveraging strategy.

In short.

Our year to day performance.

And is ahead of our vision and our guidance.

Having achieved solid operational results and the executed project delivering strong financial and so on a consolidated basis and capturing the upside or higher realized prices.

Our updated guidance position us for and a strong start in 2000.

1023.

To finalize this call and before we move to Q&A I will recap and today's headlines.

And Q2.2021, we have seen a term pro forma and across all key operational and financial metrics.

With the production.

And record and a triple digit adjusted EBITDA, reflecting $400 million EBITDA run rate.

Hello evaluates the continuous to show with Proteus retain our.

Forward, but with solid drilling and completion metrics with leave US a hit of.

The original plan and we.

Robust production metrics.

And then with cash flow and Q2.2021, we recorded solid positive free cash flow.

And also.

A successful liability management and allow us to maintain and a strong balance sheet.

Following the repayment is catered for.

We have no more material maturities in 2021.

Recent acquisitions and this industrial activities with a solid strategy rationality led us to and improved financial position supporting the acceleration of <unk> by the way the development with.

With a traffic would have been rebuilt and newest.

Digital players to the opportunity by Memorial day.

Finally as shown in the previous slide we update our 2021 guidance by increasing our activity and because by the way.

Production and also adjusted EBITDA.

Before we move to Q&A session I would like to send our.

Our investors for their continued support and non led team at Vista for their usual work and commitment.

And with that operator, please open the line for Q&A.

Thank you, ladies and gentlemen, as a reminder to ask a question on the phone line. Please press the Star then the.

1 key on your Touchtone telephone and.

To remove your question press the pound key.

Please standby, while we compile the Q&A roster.

My first question coming from the line of Ben.

And <unk> with Morgan Stanley. Your line is now open.

Good morning.

And.

Thanks for taking the question good to see the continued growth performance.

And bajada del Palo Este I have 2 quick questions 1 on M&A and you got 1.

Wanted to pick your brain.

And what would make you perhaps pursue more transactions similar to traffic.

For the remainder of the acreage you have on your plate.

Is it valuation sensitive as it does the strategy sensitive so just wanted to understand what could prompt more deals.

Putting a volume standpoint.

And the assets.

And my second question is about.

And we would've developments on the on the new hydrocarbon law, what has been agreed what expanding timelines. So any anything you could mention on that front would be super helpful. Thank you very much.

Hello.

And your question.

And the way.

And.

And yes, and yes.

Thank you Okay Super.

Well look at first of all I mean.

Let me answer the question of M&A.

We really like what we did with Trafigura on 19 for that to happen first of all we got to have.

And pumping and that we like.

And.

We have a business relationship with a man.

And models.

And worldwide.

And we believe.

Oh Wow.

And your complementary and.

When you mentioned Tina.

The ambition to do.

And based on that relationship so that would be the price point to consider and continue doing some something it seems that when somebody is now.

The margin.

And that we put together with our people.

I think this model and but the stupid I agree with you.

Sales and shareholders, Alright, and we've said.

And to both share holders.

And this case entry price.

And if we were able to find yield per club.

And.

Bye.

Hi, Bob.

That equates 30 day.

And I too.

And for that.

Thanks.

And they value that.

You can gate, yeah and lump.

And remember her line.

And it is.

We have around quite something.

And I think the locations.

Both can be.

Okay.

And if you would have been quite and 20%.

And by Bud.

And they tend.

We reported Q4 countries.

It's quite a quantify medium leading to a number like that before so we really liked by more than a simple.

And obviously right we could do more.

Net.

And we felt lindsay accurate.

Outreach and plenty of locations where income to come and we'll recap.

And the portfolio today.

And when you look at our portfolio and we have a lot.

Bank of 172.

And then and it seemed like commodity.

<unk> thousand from by the oil.

We've got more and for 'twenty 1.

And a lot more on that.

And.

By the way.

And we started to me relative and.

And I will be.

So yeah.

And so anyway.

Yes, we can into the thing.

And more on that.

So the second part of your question David Garofalo.

And you can contact.

And we have been very boots by your kind of ongoing margin.

And the 1 and 2.

2014, the federal government and changing.

Basically.

Create the framework.

And protein.

Oh.

It's already good and working very well.

Well I think vein.

No it's.

It's more and promotion and the industry.

We have seen EBITDA of Novartis zone.

Oh.

Our New York.

And the more important will be key element award and caffeine.

We've got on.

Board authorization on our EBIT.

Oh.

The export.

The net too.

And we remain on the road.

Let's see.

And we believe that is super important.

Capex investments and.

And also is super important for the company to share any effects.

<unk> on the market economic side.

No.

My comment and I've seen.

Yes, the goodwill from the government.

Hum.

And our motion law.

And I believe.

Yes.

And 1.

And as you perhaps on mute next and then.

Extra week.

Hello also other items.

In quarter, 1 and the things like 1 in Florida and up on me.

Yes.

Perfect. Thank you very much Mikael.

Thank you for that question.

And our next question coming from the line of Marcella Premier with Credit Suisse. Your line is open.

Yeah.

Good morning, everyone and thank you for taking the questions.

Congratulations on the results 2 questions.

The first 1 is for production and 2020 world.

And then we've seeing they are very.

First based drilling and completion activity and bajada del Palo Este.

We saw the 2 have data as your guidance for 2021.

38% to 39.

For those of barrel of oil.

And as per day.

For the year.

Wondering if we could see even higher prediction for this year.

Or for example, and other bets.

Students, whether it's where they work.

And when should get us.

Sales of free crudes to the guidance is conservative mode.

The second question is more.

On the outlook for 2000 and put it choose with next year.

Was wondering and how do you see capex really and completion activity and it et cetera.

The next year.

It is more about cash flow generation or should.

Should we expect.

Vista true puts a higher capex for production growth.

Thank you for taking the questions.

Thank you and months later for the question.

And.

Good question so in terms of production.

For 2022 price of oil production footprint and the 1 I think we chefs upgrade and the guidance. So I mean, but is it fair per ship.

And but what we believe.

So we have.

And that range 1000 barrel per day 19, we should be.

Now we are doing.

Good too.

And production of 2022.

1 is.

The increase of activity in Q4 and then.

<unk> guidance for Q4 and <unk>.

Put us in a position interest out there and he can.

And with a very subtle.

The starting point and also the fact that we started leading pad 11.

In December.

And so I mean per well located and.

More than that.

By the oil.

And that's been platform swung back and now what.

Election.

And in 2022.

Which will continue growing.

And it can be true are there double digit number and that's for sure.

And we probably won't be able to profit.

And much more but we yesterday and today and use our medium.

And the 2 hour leaning.

And Pete or.

And Crisco arena.

And there's always 2 and 2017.

And the effect that we are going to be much more income incentive fee during the day yet.

And also 1 thing that is important and we want to keep the strength of having.

Okay.

And.

Cash flow flow and <unk>.

And this year.

In terms of Capex.

I believe this team.

We continue or we decided to continue.

Working with 1 rig.

And we were basically half.

And similar Capex from day 1.

But we've got and this year now.

Now of course.

Got it.

Cash flow positive.

And broader discussion.

2 what we will do that cash.

For next year and going forward and.

And of course.

The main driver for us.

1 to create.

Stakeholder value.

And for that we will.

And our lives deeper.

And and options and those options okay.

Moving.

Increasing.

Interest and activity.

And you can pretty.

And much of the conflicts and.

And.

Because.

I think and granted we continue having the same operating line.

Now, having 2 day and.

So we will and are now.

And dividend and buybacks, yes on that.

And on the auction.

And that they were based on what option too.

Hum.

More stakeholder value.

So I called Martin Workarounds and your question.

Perfect.

Thank you very much.

Our next question coming from the line of Andres Cardona from Citigroup.

And if something.

Hey, good morning, everybody.

And <unk> polo, and Alejandro and congratulations on day, 1 the results from the grid and MISO and of posting a positive cash flow.

Most of my questions have been asked but I would like to understand the improvement.

Your line realization price for the third quarter to $56 per barrel.

And it.

Driven by international prices or buy and improvement in the domestic realization price.

Thank you.

Thank you Andreas Thank you for your question.

So.

I would say.

Both <unk> and being here.

And as you probably know and Argentina.

So.

When you look at what's what.

Out of Appalachia and early.

And pricing for us to date and you've got.

And 2 element of about 1.4 and Q2 you have the domestic market.

And so $2.2 million butternut and oil.

$54.5 billion.

And.

In the local market.

So we've managed to access.

Market and Q2 and so.

And the numbers.

And.

And our own approximately.

Hum.

Now that red lights taxes of 63.

6.2.

Net.

Combination of both dry and wet.

And what you see and we reported.

After their license price of $54.90 per the psyche.

Okay.

And the realization price.

Yes.

And through that and we sold and.

And what market and craft.

This down to $2.1 day.

Sure.

Commercial loans, and then move back to 2008.

8%.

Perfect.

Got you.

And you.

Net Chapman.

Brian.

Tom.

But.

We believe that night.

And I think the dynamic going forward and we'll continue with them.

It's going to change the lower free bring more visibility to what we kind of force.

But I think the overall game.

And for the University and also for Us and email.

And some extent is to be at production.

And we got more companies like <unk>.

Profit grow later and the 1 that we are probably.

We will share more.

Phil.

But come out of that.

I couldn't really to be reported and I think we are and that trend.

We have seen other companies announcing.

Investment plans.

So what you can.

And then profit election.

Yes for sure.

And very open and that and moving and increasing volume.

And.

And in that area.

Most of our.

Well I would say oil.

Part of the net.

Following up and.

I've seen and other international and also.

And if and when you see news and the eyeballs.

And Tim.

And so I think and products.

And that continues we should we should see more volume and export.

And more volume of the commodity world.

We export.

And some of demand.

And we will not I don't foresee that we see.

Deep interest and demand.

And when you see macroeconomic numbers for next year.

And on the number that we have so I'm positive and positive for Q4 positive next year and Tim hockey stick to export market.

Thank you guys.

Our next question yes.

Right.

Yes, our next question coming from the line up Alejandro and then Michelle as from now Securities. Your line is open.

Yes, good morning, gentlemen, and thank you everyone for taking the call and congratulations on great results and couple of follow up questions.

Jos Miguel you mentioned that with the deleveraging with the what you're seeing in terms of cash.

Cash flow generation for next year all of the options are open in terms of dividends or buybacks or increasing activity and so so to understand the framework for that.

We think about.

Say your target leverage is.

1.1 times, something you're comfortable with or Youre looking to go below that over the medium term.

And that's that's that's probably the first question and then the second question is.

And with pod 11 on the ball.

Border between the 2 blocks, if that's what to be successful.

Who doesn't mean that you may start on the other block kind of you know trying to to push for that development Ya.

Yeah, Yeah. Thank you.

And for that question.

And thank you for mentioning.

And then 1.1.

So, yes, and as I mentioned to you and all the option and settlement payable and I've seen.

And there's 1 team and we cannot.

And I E for gas in the context, even though we have and you.

So on that and.

That will play an important line in term of net net.

Average.

Rachel I mean and.

You know and the.

Most of the unconventional but most of the oil company data published and unconventional.

And how.

Higher limit adventure that day, 1 that we are going to achieve and they end up this year. So I always said, we want and language feel comfortable.

And that doesn't mean that due to their content and we decided also to.

Go and be nowhere on fire.

Okay, and again will depend on well wait and see that we can create more stakeholder value.

But you put 11 I think it is going to be a very interesting part.

And you know every and every ton that we move to the east.

Please proceed.

And we can meet their workouts.

And higher API gravity and there.

Sure.

No and the same level of free.

Now of course with a reduction of costs that we have share.

And at 8.2.

Our top line cost of development and bulk commodity cost or the work in 2017.

We are basically.

And the lifting cost of $7 and and development cost of $7.

And we'll continue we may be below 14.

But the router.

And of course.

And indeed element.

And so therefore.

And if we find.

And that was close to what we are producing today or even a bit lower than we ever since the day.

And because by.

And that volume could be.

Okay.

Yes, we are excited about that and.

That will allow us.

And cross more through and Anchorage.

And therefore to continue thinking.

And.

I don't know.

And how what kind of EBITDA.

We can put in place.

2 of our license you unlock that value and triple net.

Value stimulation activity.

So.

Cobalt hard answer to your question.

Yeah, No. That's that's great and just as a quick follow up what is your plan for a I get them all.

Or would you be looking to also add a partner or you you feel you can go first on your own and then look for a partner.

I think for the first and moves that we are going to do it I mean in most cases.

If you can.

Britain.

With that we'd like.

Okay.

Okay.

After having done it.

And then otherwise evaluate you see.

It makes sense.

It doesn't seem right to win in Boston and the alongside it.

In 2 cases, we would.

And in 2022.

And we'll be at least of look our sales.

Okay. That's fantastic. Thank you.

Our next question coming from the line up they just call. It does sound like credit Suisse. Your line is open.

Thank you and good morning, Thanks for taking the questions and let me go on.

Quick 1 from my side.

And I think it goes back to your answer on a previous question and bye Bye Marcello.

But with specifics being I mean, if you think of the uses of capital.

And then I wanted maybe to focus on the capital flow constraints that rehab and Argentina right.

Wherever you talked for example about paying dividends.

There is of course and district Court T.

And let's say buying the dollars to pay out.

Sure shareholders.

If you are.

And if you are generating that revenue locally in Argentina.

And my question is given that context.

And when do you think would be the best.

They need to do the uses of the cash to go forward as you have more.

As you have higher oil prices you can accelerate the development.

Would it make sense to raise.

And any sort of external capital.

And invest in Argentina, or that would just locking that cash and the country and then maybe.

And last 1 related to that would.

Would it make sense for Vista seek opportunities elsewhere.

And in Mexico, where you already have a footprint.

And just sort of have somewhere else to to locate the proceeds.

Thank you.

And final.

Thank you for your question and then.

And Moreover, what channel so you bought some.

And sort of thoughts.

Look at FEMSA.

And so point.

You said and as I mentioned before.

And we all depend of nickel and things part of the context today.

Day, we know.

And out of the content isn't going to change it.

Could change and next year.

When it comes to Optionality.

And that's coming and going to come in.

We have 2 day and structure cash out of.

But we like the Optionality.

Davidson.

And that.

Makes sense for them to do.

For our stakeholders.

And.

And you know I mean, I don't know if the index.

And I and stay call net.

Very actively.

And of course, a capex feeding and will be 1 and while they've been 1.

You can see how they proceed.

And I think net optionality, and we see habit and <unk>.

And that is put in place and so.

And we went through already.

Being able and to move it back and Hapag day by the placebo exports.

And also and.

And language.

That possibility now I don't want to say that that you've been worried that.

And go because it's a non clear and we have and equity story that 2 day is working and we are very attentive.

Oil prices that we've got 2 day and again and the cost that we have -2.

And what do you.

Ladies and gentlemen, I'll come up with that so I believe.

And I believe.

Options that we would be open and then we will evaluate what's the right.

The best way to oil.

I don't see I cannot too much and without devices you have a second part of the Bushnell and Baidu zone.

No.

That was oil.

I think the.

Second part was more on investing abroad.

We understand that from your answer I understand that.

You believe you find that you'll have better returns and our equity story and that is working in bajada deposits and Argentina and record right.

We didn't do peanut butter OIBDA ratio somewhere in that and we have.

Right.

2 day.

It's not easy to find opportunities abroad.

That can add to our share accordingly.

1 that we have here and ICP and that to date.

And then mean.

We didn't even them and cost that we have and will be difficult to find some scene, if and I'm now and again back to your previous question.

We also need to see the reaction of our share so that also and play yet and relative.

And what we do.

And with our cash okay.

And besides the buyback of shares and so but that we payable but coming back to the BD and Bard.

And yes, we see opportunities.

But broadly we think us and whereas and then we will have cash now.

We see in Democratic and investment.

Yeah.

But all of those opportunities that we see we can finally in Latin America.

Yeah.

Private bank 2 to compete where we have here and we did.

The quality of the of that.

And that resource that we have to be Eddie mentioned.

Very very clear and.

Thanks, so much for the answers.

And our next question coming from Martin Ranch and balanced capital. Your line is open.

Yes.

And most of that.

And I have here from.

And they go home capital.

First of all congratulations on a great quarter and.

And just some other ways for the and materials.

I have.

Strip ratios, whether you agree and nationals and this country and about your exports.

Expectations, but it was zero.

And.

What explore sales mix and.

Sure shall we expect for the simple model.

L E on and what do you target or bulk.

For me and interest rates too.

And then.

And we went into the.

And so that would be.

And the recent agreement with Chelsea Hotel, we mentioned that the company and was it became a foundry share in coffee and Capex.

And <unk> firsthand of tea volume was 80% of your revenues.

And it's 100% of E operational and cost.

And from.

Okay.

And what it was really safety and cash payment and decompensation with fees for expenses.

And so yes, we might Chamos Additionally, operating and line our.

Our coverage on that and finally.

Is it the sweet spot for the CEO and.

It's actually you would have to venture or it would be additional drag.

Thank you.

Yeah. Thank you. Thank you very much Martin.

For your question.

So our billing and start with the second part of the on the uncle.

And <unk>.

And.

How will you have and want to book that Lehman and quite simply and that's and we constantly.

Got it.

Our bodies.

Capex, 80%, 80%.

And the production and that.

And then.

And then yes.

Good afternoon.

That has meant that a day.

And do the thing that you and find it and that goes to other income. Okay. So that was that we're going to go and something that we've consolidated our product line.

And you know, we're kind of a capex and.

And then go through other income.

And then in Panama.

Bob brings up the Buda.

I don't think we don't need them.

<unk>.

Non.

And with the unit.

Hum.

And if our patent amendment and then.

And number 9 that is going to be.

Volume.

And the September okay.

And so.

And all that.

And <unk>.

And then.

And we're going to date and.

And number of them.

Without the for.

And I'll speak of D C up.

Okay.

And.

And then we would see.

And on the rates of the bad ones and even the higher volume.

Alright.

Or pension income.

And due to poor.

And positive.

Okay. Thank you or we would crowd.

And.

I think that volume.

And can be.

I cannot point and number 2 that.

Good day, but our.

And what have you seem to be 2 day or coupons.

2022, delinquency volume, but I've been interim report.

And you need.

Got it.

And anybody.

And 1 another.

And other.

And engine production and.

And but the amount of that.

And demand.

And you need that and we added today and that vehicle sales.

The demand and capacity diabetic binary path.

Sure.

And you all probably almost close to pulling demand.

2 per day Kobe.

Number.

Therefore, I don't see and Acs.

Thank you.

It seemed like more than that.

The last and that Russia and then.

And that's true.

And on volume.

Everybody exporting and next year okay.

Okay. Thank you very much.

And we like them.

Yeah.

Our next question coming from the line of Konstantinos Beth Lewis with 1 thing Youre line is open.

And very much and congratulations on your results again as Konstantinos and yes.

Argentina.

2 quick questions..1 is regarding your early predictions and facilities capacity. What is your current installed capacity, we're talking something beyond 38000 barrels a day.

Thank you and what happens if this production level.

And its capacity is maxed out should we expect.

Yes.

And capacity to kept paying your.

Production or should we see and expansion in processing capacity.

And the question goes for lifting costs now.

Do you have now that we have see you, reaching scale and diluting fixed costs and bajada Palo Este.

And could we expect those lifting costs remained stable and all looked at the 1 time loan, which could probably get a bit higher. Thank you.

And that's actually congratulations again.

Okay.

Thank you Konstantinos for your for your question.

Very good question and so far.

And back to the first.

Part of your question.

To date for 2022 and.

And you see it also.

And we have a plan that we could do we call that 90 day to feel that need.

We are bringing to the capacity that we got so.

2021.2020 2.

We have no program and our capacity is around 55000 barrels per day.

Hey.

You very much.

And that.

And.

And we have a baby items between 30 and 49.

We should be.

And we should be in good shape for next year to continue drilling too.

And that capacity.

And that capacity and Ddos.

We've got some room to continue growing and they would have about HIV channel.

15000 barrels per day that we can allocate and our existing facility.

Your question and lifting costs with the value that it can run.

I've been with Gordon and the leasing costs of around 7.3.

Right.

But when you look up and specifically.

And then follow oil.

And do you see.

And that the unconventional that we have and each day.

And between 3 and affordable.

And.

So.

Our.

More than that and continue to be and growing.

And our unconventional volume.

And we should see and the long run that our listings and close.

And we continue.

Good evening, so what a number and I don't want to you and your number but we can say.

And my own and seek.

That is basically there are sold.

Well keep adding unconventional production.

And our cost, but we have to run.

Our full operation and conventional operation on the convention on the completion of all about Asia.

So you could expect that lifting cost will continue decreasing mainly due to the addition of unconventional volumes.

Thank you and that is fantastic I would like to follow up a question capacity processing capacity is 1 thing but.

If you expand beyond.

Hum.

Hello, Alex.

Shouldnt it wouldn't it.

In fact on lifting cost.

Due to high and distance towards data.

Production facilities and that's all thank you very much.

Yes, I mean Mora in case, we decide to or through development.

Okay acquire additional facilities that additional facilities are not going to unique team is going to be capex below average.

And our capex to that day regimen.

And he has to be.

Put in place.

And I think we a few years.

And way from that too.

And with the highlighted by low oil.

Yeah.

And it's enabled block 2 by the way.

Of course.

Beside that we always have.

The opportunity to move from development of the high <unk>.

Is that we would acquire.

And 2 facilities, but.

The fact that we added between now and the partner and for example is like by light <unk> 10.

And then okay. So a bit non program to connect that back to the facility, so far and palo or to our existing facilities. So that will not require any additional capex.

And thank you. Thank you very much and again congratulations on your results.

Thank you.

And question.

Ladies and gentlemen to ask a question. Please press star 1.

And I see no further questions at this time I would like to turn into.

I'll call back to Michelle Darlie share for closing remarks.

Well, thank you she and demand for and trying to Nicole and thank you for your comments.

And thank you for your reports looking forward to see you again in Q3 and a good day.

Right.

Ladies and gentlemen that does conclude our conference for today. Thank you for your participation you may now disconnect.

[music].

Yeah.

[music].

Good day, and thank you for standing by and welcome to the Vista second quarter 2021 results Conference call.

This time, all participants are in a listen only mode. After the speaker's presentation. There will be a question and answer session to ask a question. During the session you will need to press star 1 on your telephone.

Please be advised that today's conference is being recorded.

You require any further assistance. Please press star zero and I would now like to hand, the conference over to your speakers a day Alejandro chatter and Yaacov. Please go ahead.

Thanks, and good morning, everyone. We are happy to welcome.

Welcome you to reach the second quarter 2021 results conference calls and I'm here with me and <unk>.

Mr Chairman and CEO, Pablo it up and Dolby CFO and 1 that O E C O O.

Before we begin I would like to draw your attention to our cautionary statement on slide 2.

Please be advised that our remarks.

Today, including the answers to your questions May include forward looking statements. These forward looking statements are subject to risks and uncertainties that could cause actual results to be materially different from expectations contemplated by these remarks.

Our financial figures are stated in U S dollars and in accordance with international financial reporting standards.

Yes.

During this conference call, we may discuss certain non <unk> financial measures such as adjusted EBITDA.

Reconciliations of these measures to the closer to half price and measure it can be found and the earnings release that we issued yesterday.

And just check our website for further information.

Our company with oil and gas is associated and only and I will start.

Something like that about your outlet, Oregon ice and there are lots of Mexico, registering and there was time and he kind of level loaded and the New York stock exchange.

You guys have a common stock out of beta and their all time and he kind of evaluate it and be a USD and day, New York stock exchange basically cut off our Warren.

B PW 4 O 8.8.

I will now turn the call over to Miguel.

Thanks, All day.

Morning, everyone and thank you for showing and this certainly and Corp.

I am delighted to share with you our results of the second quarter of 2021 during which we have obtained understanding attainment across all key operation and financial metrics.

We made good progress with respect.

2 our 2021guidance on the back of our strong execution in terms of drilling and completion pace and Mccarrell Palo Este.

Q2, 2021, with our Florida Comm safety every quarter with total production growth achieving a record of $39.9 <unk>.

Effect per day.

This implies $60.70 increased year over year oil production was up 101% year over year and now.

19 sequentially boosted by the time of patent number 7 in <unk>.

And by the weighted in March.

It is fair.

Per se that Q2, 2020 is a low comparison base given the production shut in and respond to the drop in demand due to the Covid pandemic. This comment applies to most metrics compare on the internet and motivated.

Total revenue were at a 165 million.

And <unk>.

We tripled revenues year over year, but also by the phone robustly quarter over quarter, mostly driven by the increase in oil production and a stronger realized oil prices and <unk>.

And site, we've made a good decision to ramp up activity in late Q3 last year.

So we had and now capturing higher oil prices a growth and a stronger production base.

Lifting cost per Boe was.

Was $7.3 per quarter, a 15% reduction year over year, reflecting lower incremental cost and <unk> by the RFT, which continue.

In our fixed cost base.

Adjusted EBITDA was.

$102 million.

<unk>, a turning point and our performance and achieving 62% adjusted EBITDA margins.

Capital.

Expenditure for the quarter was $75 million.

And in line with execution of our 2021 guidance and reflecting the completion of our credit but for the year in bajada Palo Este.

During Q2, 2021, which generate positive free cash flow driven by our robust cash flow through and operation and making good progress.

We lead and management.

Cash at the end of the period was $237 million net.

Net debt.

$368 million.

We will now deep dive into the main operational and financial metrics. So please turn to slide 4.

Total production during Q2, 2021 was up 67% year over year and 17 for the same quarter over quarter halfway through the year. It leaves US ahead of our original 2021 guidance.

Production growth was driven by our flagship development and high valuation.

Evaluating where with adding but 7 in March.

Given the high share of oil and this development, we see greater impact in the oil production metrics, which increased 101% year over year and 19% quarter over quarter.

During.

And <unk> 2021 we executed workover projects and 2 gas plays.

Which drew a gas production increase of 10% quarter over quarter, and 5% year over year, allowing us to comply with our plan and gas commitment.

And Q total revenues in Q2.2021 were at $165.3 million.

The strong increase yellow area, having doubled both production and realized oil prices.

Sequentially total revenue increased by 43% and driven by the additional production generated.

Weighted by the time of patent number 7.

And higher oil and gas prices.

And our light oil price in Q2, 2021 was 54, 9%.

<unk> per barrel up 107% year over year, and 21% quarter over quarter.

And we.

Market accounted for 83% of our reported total sales in Q2.2021, reflecting an improvement in domestic crude oil price to the $50.455 per barrel range.

Sales and transport market accounted for the remaining 70%.

Of oil volumes.

With the contract sign when Brent was trading around $63 per <unk>.

We still see pricing of export oil with discounts to brand of late and $2 per barrel.

We are continuing with our strategy of building a sales group early on.

To look in revenues and fund investment activities.

Most of our Q3 oil said with a mix of domestic and export volumes have already been looking at an average realized price of approximately $56 per volume.

Realized gas prices have increased 59%.

And he had already year to $3.5 per million Btu gas.

Did buy the planning and gas winter price of $4.1 per million Btu applicant to approximately 60% of our total volumes and starting may 2021 and <unk>.

Recently interest repricing.

Increased from $1.9 per million Btu in Q2, 2020 to $3 per million Btu in Q2.2021.

And your interest line sick.

We see our continuous improvement in terms of lifting cost per.

Total lifting cost per.

Per the quarter was $26.5 million, partially driven by an increase in oil field activity, but also by the impact of a stronger peso and our operating context.

We have seen the swings in FX and the pass and they always have minor impact in our total cost.

Price is the graph on the right shows how the production and increase in the hired by the weighted continues to absorb our fixed cost base and driving a reduction of 3 per same quarter over quarter to $73 per day.

In Q2.2021 adjusted EBITDA.

And $102.3 million.

It implies and expansion of ninth time year over year and.

75% growth quarter over quarter.

<unk> and the boost in revenues as described earlier and lower lifting cost per <unk>.

Adjusted EBITDA margin.

<unk> was 62%, reflecting an improvement of 12 percentage points quarter over quarter, and 42 percentage points year over year.

Netback for the quarter was $28.2 per viewing nadolol per view about.

Q1, 2021 are stable.

Cost per the UAE allow us to capture the full increase in realized price.

Moving to our financial situation, which I believe is also.

A highlight of this quarter, we were free cash flow positive carry and generated $35.5 million and Q2.2020.

1 with a capex level of $85 million.

Cash flow opened and operating activities and through to 2021 shows a sequential increase of 270% for a total of $116 million.

This reflects and.

In Greece and gas solution.

Generation Z.

And even mainly by higher revenues.

Cash flow from investing activities was $85 million.

In line with Capex activities was $74.6 million.

Approximately 85% of the investment was deployed and back.

And Palo Alto.

Cash flow from financing activities was $37.8 million.

During Q2, 2021, we repaid a total of $36 million and bank loans and ensuring we successfully raised that basically key volume.

7.

And $1.4 million in essence and capital market.

We issued $38.8 million bond and peso dollar and link you in 2 years with a 4% coupon and.

Additionally, a $32.6 million or bonds and peso inflation.

Adjusted U and $3.75, with a coupon of 4%.

Additionally during July.

We will draw 24 million for and available credit line with local banks.

Discussed race with new debt is being full.

Really utilized to repay all of that.

We have already 8 day $45 million corresponding to our top 10 alone and we will repay $50 million corresponding to our Cds 1 bullet zone.

Under these assumptions total depth.

Second is forecasted.

At $534 million, which is $16 million lower and Q1.2021.

Our increasingly strong operating and financial performance during the last quarter has led to progressive non manifestation of financial ratios we were negatively.

Impacted 1 year ago, when the lockdown restrictions softening through the oil prices and <unk>.

And Q2.2021 net leverage ratio was 1.7 times adjusted EBITDA.

Based on our plans for the next 2 quarter, we are forecasting and net leverage ratio.

Activity of approximately 1.1 times adjusted EBITDA by year end.

Our flagship development and the Hyatt Valueact to continue through the regular day.

Chart on the left of slide 9 shows our total production and we started this project.

And.

<unk>, a day and date of each part.

The timing of patent number 7 and then over the previous quarter boosted share production in Q2.2021.

But 8 landed 2 with and our casino and <unk> and the organic growth with an average lateral length of approximately.

And the 2006 hundred meters and 54 average frac stages per well.

Normalized drilling and completion cost per well was $9.5 million in.

And in line with our previous Pat.

We are currently finishing drilling a 4 well pad and number 9 which will.

<unk> and <unk>.

<unk> in late Q3.

I will now share a summary of our business development activity.

And shown 2 and Ta, we signed and investment agreement with Trafigura for the show and development of fight, but a 4 well each and the colored.

MPT.

And the price tax paid by <unk> water and $5 million per pack, which equate to $55000 per acreage.

They're working interest.

And set back.

And 80% to Vista, and 20% with Trafigura.

With each partner and pain.

By the way its share of oil Capex and receiving pro rata production.

We paid to Vista, and operator fee that covers all day and indirect costs associated with production.

Production.

Vista remain 100% type day call debt of the cash.

And operator of the block.

Previously we have sold our remaining 10 percentage recording on our Marlboro cigarettes concession per share for $21.5 million.

And play evaluation was about 13, south and Golar package, which is 1 of the highest multiples.

And for a concession and become more of a history.

Both these have a strong strategic rationale.

Profit.

Improve our financial position and further allowing us to accelerate it.

By the way.

Also focusing our capital and team on our core.

Translation of our shape with diverse economic and allow us to generate higher returns at the consolidated level.

Finally, with Trafigura and strengthen the relationship with our key domestic offtake it and 1 the most important crude oil traded on a global level as well as bringing in new players.

Corporate and <unk>.

I will now review and update on ESG matters, where we have made good progress to reduce greenhouse emissions in our operations.

As discussed in our previous call. During Q1, we finished the study we determine our base.

<unk> emissions.

We cover our scope, 1 and scope 2 emissions, providing granularity at the asset level and identify and may offenders.

This milestone was a significant achievement and laying the foundation for an actual number and emission reduction plan.

We are currently working.

Such a plan, which will be this close and our Mexican liability reported this.

As planned we sit short medium and long term cooperation and production growth consistent with a 2015 Paris agreement.

And Q2, we approved a plan for 2021, which will allow us.

And as to reduce 100% of the new emissions generated by the incremental production and embedded in our 2021 activity growth program.

This plan is being executed and is forecasted to lead to a 30% reduction year over year and emission intensity down to approximately 2009.

Keynote <unk> <unk>.

2 accumulating better really.

Sustainability is vital to our business and strategy.

And I am confident we are taking the price deck to becoming a leading low cost and increasingly and low carbon energy producer.

We made further progress regarding our commitment.

Hello, and standard quality and the first semester of 2021, 58% of our new high and were women.

And improvement compared with a 50% achieved in 2020.

Finally, we have continued to support social investment and the town of Cottrell Rio <expletive> we have finished.

The first stage of a bicycle line project that will attach 8 kilometers.

We have also assigned company premises and capital to reduce our SEC Covid vaccination Center.

Moving to slide 12, and we present, our updated guidance for the year. It reflects.

Afflicting improved performance this video reach and Atlanta.

We have recently skin and 16, new wells in Bajada, Palo Este for 2021, we have already <unk> 12 of such with.

And we have accordingly, really and the last well of the 4 pack, which will be completed during Q3.

We have added the fight back to the annual work program, we will be drilling during Q3 and completed during Q4.

And the rationale behind this decision is that we have and robust balance sheet. Thanks to the higher production.

Net realized price and lower development costs.

Which.

Allow us to add further activity with our Lucy and capital discipline and prepared us for gas.

Started in 2022.

We are updating our directional guidance and a range of 37% <unk>, South and Boe's per day to a range of 38% to 39 sales mbo.

Bo per day.

And is forecasted to increase driven by faster drilling and completion, which is enabling earlier timing in bajada del Palo Este.

Capex with our expected workload DVT and.

And to our leases 10, and the contribution of the feedback.

And then of the year.

Lifting cost guidance has been revised from less than $8 per the UAE to approximately $7.5 per per year.

Q1, and Q2 came in at 7.5 and $7.3 per <unk>, respectively.

We forecast.

To remain within the range and Q3 and Q4.

As incremental production continues to absorb our fixed cost base.

We are revising upwards, our adjusted EBITDA guidance from $275 million.

<unk> 3 <unk> hundred.

And the $25 million.

Adjusted EBITDA has been positively impacted by the additional production higher realization prices and Q2, and Q3, 2021 and lower lifting cost per day.

Based on the acceleration of our highlight Palo Este development, we're increasing our capex guidance from.

275 million to $310 million.

Looking at the graph on the bottom left it is clear that we are not allocating the entire and increase in adjusted EBITDA and capital expenditure reinforcing our commitment to capital discipline.

And finally.

We are maintaining our guidance for gross debt of approximately $500 million.

And now and guidance for our net leverage ratio, which is forecasted at approximately 1.1 times adjusted EBITDA.

And at the end of the year.

Clearly mark.

Successful execution.

Our de leveraging strategy.

In short.

Our year to day performance is ahead of our original guidance, having achieved solid operational results and the executed project, they leave and strong financial and so on a consolidated basis and capturing the upside.

Realized prices.

Our updated guidance position us for and a strong start in 2022.

To finalize this call and before we move to Q&A I will recap and 2 day headlines.

And Q2.2020.

<unk>, 1 we have seen a strong performer across all key operational and financial metrics with.

With the production record and a triple digit adjusted EBITDA, reflecting a $400 million EBITDA run rate.

<unk> continues to show with broadest retain our setup.

Forward, but with solid drilling and completion metrics with leave US ahead of the original plan and robust production metrics.

And then with cash flow and Q2.2021, we recorded solid positive free cash flow oil.

So it's.

And <unk>.

And for liability management and allow us to maintain and a strong balance sheet.

Following the repayment of scale for US we have no more material maturities in 2021.

Recent acquisition and this investor activities with a solid strategic rationality led us to and improved financial position.

And supporting the acceleration of <unk> by the way the development.

With the Trafigura deal, we brought and numerous strategic players to the opportunity and become more of them.

Finally as shown in the previous slide we update our 2021 guidance by increasing our activity and because by the weighted probe.

Fraction and.

And also adjusted EBITDA.

Before we move to Q&A session I would like to say that our investors for their continued support and non led team at Vista for their usual how to work and commitment.

And with that operator, please open the line for Q&A.

Thank you, ladies and gentlemen, as a reminder to ask a question on the phone line. Please press. The Star then the 1 key on your Datacom Telecom and.

2 of them move your question press the pound key.

Please standby, while we compile the Q&A roster.

My first question coming from the line of Bill.

With Morgan Stanley Your line is open.

Good morning.

100, and thanks for taking the question and good to see the continued growth performance and Bajada del Palo Este I have 2 quick questions 1 on M&A.

I wanted to pick your brain.

And 1 time and what would make you perhaps pursue more channel.

Actions similar to taxi quota for the remainder of the acreage you have on your plate.

Is it valuation sensitive is it.

Strategy sensitive so just wanted to understand what could prompt more deals.

Owning a value a stamp on the on the asset and.

And my second question is about any developments on the on the new hydrocarbon law.

Has it been agreed what is spending timeline. So any anything you could mention on that front would be super helpful. Thank you very much.

Yeah.

Overdue norms and jewelry and Mike for your question.

Units and new World.

Yes, and thank.

Okay Super.

Well look first of all I mean.

Let me answer the question of M&A.

And we really like what we did with Trafigura and 19.

Hello.

First of all we got.

And pumping and that we like.

And.

Yes.

So good relationship management.

And management.

Hum.

And worldwide.

We believe a little bit.

And so.

Complementary.

When you mentioned Dana.

Or would that be something to do something.

And is based on that relationship.

Net.

The price points, you can see that'll continue and doing some something seem that when somebody is now.

And the model.

And we put together and we probably would've and <unk>.

And seen this this and more.

And but the Super I agree with you to share holders alright, and we said 2 boes share holders.

And this case entry price.

And if you wouldn't work finding yield per pod.

And by midyear.

And for Bob.

Great.

And I too.

And the like for that.

Good.

And the value that you can get.

And 1 part.

And remember her line.

Themselves and it.

We have around price something.

And I think the locations.

Which would be helpful.

Okay great.

Profit.

And people like but and <unk>.

And they said before Q4 countries.

It is.

<unk> 5 million, leading to a number that I knew before so we really liked and more than.

And while we could do more yes.

And we felt Lindsay.

And plenty of locations where income to come and what we have.

And the portfolio today.

When you look at our portfolio, we've got the lumber.

Thanks.

172000 acres and it seemed like a.

And 2000 and from by the oil.

And we have worked for 21000 Nomura.

And so and.

By the way.

And we start to read out.

And I.

And we see it so yes, that's right.

And what I'm, saying is yes, we can entertain.

And more on that.

Second part of your question David Garofalo.

And you can contact.

I would say bad and we have very good sight youll kind of what we're doing there.

No.

And Tucson.

Well in the pit and.

Goldman paths and changing.

Basically.

And the framework for share project.

And we keep it's.

Already moved and working very well now.

And now I've seen.

Jamie.

And some more promotion to the industry.

We start seeing EBITDA.

And Oh this.

New York and.

And I think the more important are the key elements of World Cup team, they've got and 8.

And these stations on EBIT.

Part of the export.

And there were 2.

Who remain abroad.

FX per seat.

And we believe that is super important to attract investment.

And also is super important for the country to share a effects.

Shell on the macroeconomic side so.

And my.

And I think.

Yes.

Goodwill from the government.

And that promotional law.

And I believe footwear Ikea.

Thanks Hal.

And once you have some news and the next day.

Next week.

The law also others items.

And what I've seen this is the quarter, 1 and the things that I want in Florida in upfront.

Perfect. Thank you very much Mikael.

Thank you and your question.

And our next question coming from the line up Marcella.

Premier with credit Suisse. Your line is open.

Good morning, everyone and thank you for taking the questions. Congratulations on the results 2 questions. Fortunately the first 1 is for our production and 2020 World I mean, we've seen a very fast paced drilling and completion.

Recent activity in Bajada del Palo Este.

We saw that you have updated your guidance for 2021 with 38% 39, a task force.

Barrel of oil equivalents per day.

And do it for the year.

Wondering if we could see even higher prediction.

For this year.

Or for example, and other beds. It's June 2021 I, just and when you get a sense of free crudes did the guidance is on a conservative mode and.

And the second question is more on the outlook for 2020 choose them next year.

And I was wondering and how do you see capex really and completion activity and it et cetera.

For the next year.

It is more about our cash flow generation or 2 I mean should we expect.

Vista true, but a higher capex for production growth.

Thank you for taking the questions I get.

Thank you and monetize them for the question.

So and but most of the election and <unk> focal point and electron pump line.

1 I think we chefs.

The guidance, so I mean that is that fair.

Uh huh.

And we.

So we have made there.

1000.

Yeah.

And now we are moving.

And I need to cover.

And Thats true.

1 is.

The increase.

Activity in Q4, and then getting some guidance for Q4 and food.

Food, asking and that had a policy change and people.

And with a very subtle.

And I can point and also the fact that we.

And kind of bleeding, but 11 a.

In December.

And also I mean per wedding located.

And none of them.

By the oil.

By the way.

That's <unk> capital and swung back and on what.

Production.

We can continue growing.

It's going to be true on the data.

And that's for sure.

We probably won't be able to profit at a much more but we have to do.

And today, we've got going and use of what are the minimum.

Our leaning.

And B B.

And the valve and.

And in 2017.

And I think that we are going to be.

More and increasing.

Giving that yet and also 1 thing that and portable and we want to keep the strength.

And oney.

Cash flow and we have this year and.

Demo.

Capex.

I believe.

We continue and we decided to continue.

No.

Working with 1.8.

And we were in.

And we have it.

Assuming that accompany the 1 that we've got this year now.

Now of course, we ought to be.

Cash flow positive.

And broadband and discussion.

2 what we would do.

Cash.

Our next year and going forward and of course.

The main driver for us.

I think it's taken.

Hold their value.

And for that we do.

And then a nice deep.

And and options and I know adoption, okay, including.

Increasing.

Interest and activity.

And.

And much of the conflicts.

And he goes.

I think bill and granted that 1.

We continue cutting the sales or anything like it.

And we're having to date and of course, and we will analyze that and Steve.

They and dividend and buybacks yes.

I know the auction and we shouldn't have happened and that they would based on what option too.

And we ate more stakeholder value.

So I called Martin Orthodontist and your question.

Perfect.

Thank you very much.

Our next question coming from the line of.

And Ross <unk> from Citigroup Your line is open.

And good morning, everybody.

And he and polo and Alejandro.

<unk> from day 1.

And the results from the grid and MISO of posting a positive cash flow.

And my questions have been asked but I would like to understand the improvement in realization price for the third quarter to $56 per.

You see it.

And I've been by international prices or buy and improvement in the domestic realization price.

Thank you.

Thank you Andreas Thank you for your question.

So.

And we've said that.

Both <unk> and being here.

A few flow already known and nursing female.

So.

And you look at what's and out of Appalachia and he says.

And pricing for us today, you've got 2 element of that.

And for Q2, new Fabs and the domestic market and <unk>.

2 we saw $2.2 million barrel of crude oil.

And with $4.5 billion and for Nevada.

When you're in the local market.

And so we might have to access to export markets and Hugh.

And so.

And the buyback.

Yes.

And around protein and.

63.

Now that red lights taxes of 63.

Hum.

<unk> 6 okay.

The combination of both.

And what.

We would see and we reported.

Our realized oil price.

For 90 day Titan Okay now.

They are early stage.

Right.

And.

But and we saw in the market.

And it sounds like to rollout.

1 day.

Commodity foam and then move back to the 8%.

And for tax.

That basically means.

And you.

Net Chapman.

And for the brand.

In June.

But we were basically realized.

I think the dynamic going forward and continue with them.

And that changed the lawful and bring more visibility to what we.

Sure.

Yeah.

But I think the overall game here.

And also price and email.

And some extent is GMP production.

So more to come from Lisa, but profit grow later and the 1 that we are probably.

<unk>.

And some.

And more to Seattle.

But coming out of that I couldn't really to be affordable and I think we are and that trend.

<unk> seen other companies announcing.

Investment plan.

So what kind of income production.

Wipe yet.

And it has been very open and that and moving and increasing volume.

And then.

And in that area.

More so.

Well I would say, Florida.

And it.

Following up and we have seen and other international today also.

Yeah.

And.

And you see news and the I won't increase production.

And I think that.

And that continues we should we should see more volume and.

More volume of Docomo.

And we export.

And some of demand and we will.

I don't foresee that we see.

Deep interest and demand from you see macroeconomic numbers for next year. So it's going to be around the number that we have so I'm positive and positive for Q4 positive next year and second half.

Access to export markets.

Thank you guys.

Our next question relative to Ly.

Yes, our next question coming from the line up Alejandro the Michelle as from now Securities. Your line is open.

Yes, good morning.

And thank you very much for taking the call and congratulations on great results and a couple of follow up questions you.

You mentioned that with the deleveraging with the what you're seeing in terms of cash.

Cash flow generation for next year all of the options are open in terms of.

And generally we theirs or by bar for increasing activity.

To understand the framework for that cash.

Should we think about.

Say your target leverage is 1.1 times.

And youre comfortable with or Youre looking to go below that over the medium term.

And it does.

That's that's probably the first question and then the second question is.

And with 511 on the border between the 2 blocks if that were to be successful.

It doesn't mean that you may start on the other block kind of you know trying to free to push for that development too.

Yeah Yeah.

Thank you.

And look for that question and.

And thank you for I mentioned and.

The 1.1.

So yes.

And I mentioned to you and all the option and settling the table I think that 1 thing that we can.

And in fact reported cash.

And the context, even though we have a view on that and.

We play in and put them all in.

Demos.

Net net at a ratio.

And that you know and.

Most of the and convention, but most of the oil company that Michael mentioned and I.

Cash and.

Higher Levered adventure that day 1.

We are going to achieve and end up this year. So I always said, we want and language feel comfortable.

That doesn't mean that due to their content and we decided also to go.

Go and be nowhere do I'd, probably yet, okay, but again will depend on a wait and see that we can create more.

If they called and value.

But you put 11 I think it is going to be a very interesting part.

As you know every time every time that we move to the east.

And we precede that.

And we can meet their workouts.

Higher API gravity and there.

And therefore.

And the same level of things now.

Now of course with a reduction of costs that we capture and at 8.2 way our top line cost of development.

And at the cost or the work in 2017.

And basically.

And with the lifting cost of $7.

And development cost of $7.

And we'll continue we may be below $14.

And so.

And I'm of course.

And indeed element.

So therefore.

And it's been refined.

It does.

That was close to what we are pleased <unk> day, or even a bit lower than we ever since the day I mean, because by the rate and.

And that BARDA and could be.

Okay.

Yes, we are excited about that and that.

And will allow us.

And craft, a more through and markets.

And our products and continue thinking.

Moving on I don't know.

And how what kind of at the moment and we can put in place.

To her license, you unlock that value and and at 8.

Value simulation.

And with.

So.

I hope our comments and your questions.

That's great and just as a quick follow up what is your plan for and I get them or would you be looking to also add a partner or you. You feel you can go first on your own and then look for a partner.

I think for the first and move that we're going to do.

I mean and.

Both cases.

Yeah.

And.

With that we'd like.

You can do that day.

Okay.

Hum.

And then otherwise you would see.

It makes sense.

Okay.

And in Paris.

Alongside that.

<unk>.

In 2022, we would be and east of look our sales.

Okay. That's fantastic. Thank you.

Our next question coming from the line of they just got does sound with credit Suisse. Your line is open.

Okay.

Good morning, and thanks for taking the questions and they go in.

Quick 1 from my side.

And I think it goes back to your answer on the previous question and Bye Bye Marcello.

But.

Specifics being I mean, if you think of the uses of capital.

And then I wanted maybe to focus on the capital flow constraints that rehab and Argentina right.

And wherever you talked for example about paying dividends.

There is of course.

Chris and difficulties.

They buy and the dollars to pay out.

Sure shareholders.

You are.

If you are generating that revenue locally in Argentina. So.

And my question is and.

And given that context.

And when do you think would be the best.

Yes.

And the thing to do the uses of the cash to go forward as you have more.

As you have higher oil prices you can ex.

Excellent rates of development.

Would it make sense to me.

<unk>.

Any sort of external capital.

Invest and Argentina or that would just locking that cash and the country and then may be finally last 1 related to that.

Would it make sense for Vista speak opportunities elsewhere for instance, and in Mexico, where you already have a footprint.

Just sort of have somewhere.

And is true to look at the proceeds.

Okay.

Okay.

Thank you Rishi as per your question then.

A question and Moreover, which and also.

And sort of thoughts.

And so forth.

And you said and as I mentioned with volume.

And Nick on things part of the context today, we know.

And out of the context is it going to change it.

Could change next year.

When you come to Optionality.

And that's coming and you'll come in.

We have.

And a structural cash out of that.

But give us optionality and team.

Pay dividend and feed.

That is and what really makes sense for us to do.

And for our stakeholders.

And you know and Toronto.

Our investors and stakeholders.

Today.

And actively.

Of course, a capex feeding and will be 1 and where they go and 1 on 1 and CEO holiday and proceed.

And I think that Optionality, when we think of it and if it is.

<unk> put in place and so we went through already.

<unk>.

And about the Hapag day part of the placebo exports.

And also in.

And the language that possibility now I don't want to say that that is been worried that we can go because it is not clear and we have I think with your story a 2 day is working and is very attractive.

Being able to oil price, but we got to date and.

And again a day.

Of course that we have -2.

Sure.

And as we get them in and Qualcomm overtime. So IBD.

And I believe options that will be open and then we will evaluate.

And the best way to oil.

I don't see and I can add too much to add devices you have a second part of the question on that day.

No.

That was all I.

Okay.

The second part was more on investing abroad B understand from your answer I understand that.

And you believe you're fine.

And you'll have better returns and our equity story and that is working in and bajada deposits and Argentina like a minute.

Great.

We've been looking at but all of the ratios somewhat and we are ready.

E D rights.

2 day.

It's not easy to find opportunity.

And that can add to our share accordingly.

1 that we have here and I shouldn't can net to day.

And then mean.

And the development cost that we have and will.

And be difficult to find some scene and now and again back to your previous question.

We also need.

And to see the reaction of our share so that also and play out a relative and in.

What we do.

Our cash okay.

And the buyback of shares and so but.

And we pay abroad, but coming back to the easy part.

And yes, we see opportunities.

It probably will take us from where it is and we will have cash now.

We see in Denmark, and some investment.

And that all of those opportunities that we see when finding and Latin America.

Is that kind of thing too to compete where we have here and we could.

Quality of the of that resource that we have to be Eddie mentioned.

Very clear thanks, so much for the answers.

And our next question coming from Martin Ranch and balanced capital. Your line is open.

Wilson.

Yeah.

Yes and.

Hello, and lots and lots of here from <unk> capital.

First of all congratulations on a great quarter and.

And as far as waste for their materials.

I have.

And strip ratios, where would you agree.

And if something about your exports street expectations.

And I wanted to know and.

What explorer sales mix and shoot shall we expect for the simple cloud.

The year on whether you would target or goal.

Paul.

And so interest rates too.

And then and.

We want to share them and obese and that would be booking that.

And there we signed agreement with traffic and Buddha, we watching that.

Company and will be became unresponsive and coffee and Capex.

People and of the volumes.

80% of your revenues.

Our next 100% of E operational and cost.

And from that we.

And you would have received the cash payment and decompensation free for expenses expenses, which might chamos additional net of revenue line.

Oh.

And on that finally.

Hum.

Is it the sweet spot for this year related to the joint venture or it would be additional to that.

And thank you.

Yep. Thank you.

And you really much Martin.

And your question so.

So our bonus.

And part of the on the ankle.

I think.

The Oh, you got and want to book that momentum by simply mean that said, we constantly and I would've thought.

And our bodies.

Capex.

And we hope that people some of the production and that.

Consolidated.

And then $5 million.

That is meant to receive FTC trucking and retain that you wouldn't find it that goes to other income okay.

And that's how we're going to consider doing that.

So we consolidate our part of watch an hour pumping and work on.

Capex under $10 million.

Net income.

And then in Panama.

The <unk>.

And our people are so lumpy.

We don't need to be.

No.

T D.

Right.

Pardon me.

And number 9.

Non <unk>.

Volume.

And Oh, and then September.

And so on.

And all that.

And then.

And also is going to be.

And.

And number of thin.

Got it.

All right.

Yep.

Okay.

And then we would see.

Participating on day rates of the bad ones and even the higher volume.

Alright.

Okay and pension.

And do full bore.

And positive.

I'll keep that works out.

We have EBITDA volume that's cash.

And.

I cannot put a number to that.

But.

Our 2 day or coupons.

2020, too difficult to tell you, but and.

And can report.

And you need everybody sees and.

Hi, everybody.

<unk>.

And another.

And entering production in.

And that's a more of that.

And demand.

And we'd be in EBITDA, we added today and that per se.

The demand and capacity that is primarily cash.

We see oil per argue almost close to demand.

And to pre Covid numbers.

And therefore, I don't see and Ics.

And that we had expected.

It seemed like more than that.

The last and the rationality that.

And to see additional volume to be exported and.

And next year Okay.

Okay. Thank you very much.

And welcome.

Our next question coming from the line of Konstantinos by price with 1 thing your line is open.

Thank you very much congratulations on your results again, konstantinos and somebody else for Wednesday and Argentina.

2 quick questions..1 is regarding your early predictions and facilities.

Capacity what is your current installed capacity, we're talking something beyond 38000 barrels a day and what happens if this production level.

Facility's capacity is maxed out should we expect.

And that processing capacity to.

To curtail your.

Production or should we see and expansion in processing capacity and the second question goes for lifting costs now.

Now that we have seen.

And you're reaching scale and diluting fixed costs in bajada del Palo Este.

And could.

And we expect those lifting costs to remain stable or was it a onetime low which could probably get a bit higher. Thank you very much and congratulations again.

Okay.

Thank you Konstantinos for your for your question.

And then it would question so coming back to.

The first part of your question.

To be.

<unk> and <unk>.

This year also.

We have a plan that we.

Good day.

And to feed that.

And <unk>.

And that will bring into the capacity that we've got so.

For 2021.2020 2.

We have no program and our capacity is around 55000 barrels per day.

<unk>.

We will and.

And.

And we have big items.

And from 9 so we should be.

And we should be in good shape.

And see it to continue drilling too.

And that capacity.

And that capacity and gave us.

And some room to continue growing and they would have an additional 15000 barrels per day that we can allocate and our existing facility.

Your question and <unk>.

<unk> per BOE is already embedded and 1.

I think we've got the quadrant and the lifting cost of around 7.3 and brought out in February.

But when you look up.

And then follow oil.

You'll see that the unconventional that we have.

Good day.

Lifting cost per lead in between 3 and affordable.

And.

So.

Our model is that it continues to be and growing.

Our and conventional volumes.

We should see and the long run, but our lifting cost.

And it continue.

And could each team.

And what a number and I don't want to really a number that we can meet Panama and seek.

That is basically there are sold.

And the.

Adding unconventional production and <unk>.

And our fixed cost but without.

Ron.

Our full operation and conventional operation on the convention on the conventional operations.

You could expect that will continue.

Mainly due to the addition of unconventional oil volumes.

Thank you and that that's fantastic.

I would like to follow up question capacity processing capacity is 1 thing, but if you expand beyond the high level.

The oil states.

Shouldnt it would really.

Impact on lifting cost.

Hi, and distance towards protect.

Production facilities.

And that's all thank you very much.

Yes, I need a motor oil.

In case, we decide to oil development will require additional contingencies that additional facilities are not going to munis team is going to need capex and <unk>.

Net capex to that day regimen.

To be.

And in place.

I think we a few years.

And wait.

From that to happen.

And by law.

And.

It's enabled block to Buckeye.

Of course, if we decide that we always have.

And the.

The opportunity to move from development of Belo.

Is that we would acquire new facilities.

The fact that we added between now and the partner and for example is led by Tim.

Okay. So I've got no program to connect that back to the facility.

Palo or.

The existing facilities, so that will not acquire and their return on capex.

Thank you. Thank you very much and again congratulations on your results.

Thank you.

Question.

Ladies and gentlemen to ask a question. Please press star 1.

And I see no further questions at this time I would like to turn and so called Baxter Michel entirely share for closing remarks.

Well, thank you shouldn't demand for and trying to Nicole and thank you for your comments.

And thank you for your reports looking forward to see you again in Q3 of EBITDA.

Day.

Ladies and gentlemen that does conclude the conference for today. Thank you for your participation you may now disconnect.