Q1 2024 Vista Energy SAB de CV Earnings Call
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Operator: Good day, and thank you for standing by. Welcome to VISTA's first quarter 2024 earnings webcast 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 11 on your telephone. You will then hear an automated message advising that your hand is raised.
Good day and thank you for standing by welcome to Vista's first quarter 2024 earnings webcast 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 one one on your telephone you will then hear an automated message advising your hand is raised to withdraw your question. Please press star one one again.
Operator: To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded. I would now like to go ahead and turn it over to your speaker, Alejandro Cherniakov, Vista Strategic Planning and IRO. Please do so. Thank you.
Please be advised that today's conference is being recorded.
I would now like to go ahead and turn it over to your speaker Alejandro children uncle <unk> strategic planning and Iroh. Please go ahead.
Alejandro Cheracov: Thanks. Good morning, everyone. We are happy to welcome you to Vista's first quarter of 2024 results conference call. I am here with Miguel Galuccio, Vista's chairman and CEO, Pablo Verapinto, Vista's CFO, and Juan Garoby, Vista's COO.
Alejandro: Thanks. Good morning, everyone. We are happy to welcome you to <unk> first quarter of 2024 results conference call I'm here with Mcgarrigle with choppy start as chairman and CEO Pablo would have been dealt with our CFO and one that is the fuel bill.
Alejandro Cheracov: 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. 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 US dollars and in accordance with International Financial Reporting Standards, IFRS.
Alejandro: 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.
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.
Alejandro: Our financial figures are stated in U S dollars and in accordance with international financial reporting standards I FRS.
Alejandro Cheracov: However, during this conference call, we may discuss certain non-IFRS financial measures, such as adjusted VTA and adjusted net. Reconciliations of these measures to the closest IFRS measure can be found in the earnings release that we issued yesterday. Please check our website for further information. Our company is the Sociedad Anonima Bursátil de Capital Variable, organized under the laws of Mexico, registered in the Mexicana de Valores and the New York Stock Exchange. Our tickers are Vista on the Bolsa Mexicana de Valores and BIST on the New York Stock Exchange. I will now turn the call over to Miguel.
Alejandro: During this conference call, we may discuss certain non <unk> financial measures such as adjusted EBITDA and adjusted net income.
Alejandro: Reconciliations of these measures to the closest <unk> measure can be found in the earnings release that we issued yesterday.
Alejandro: Please check our website for further information.
Alejandro: Our company is associate annually Marvell fatigue, or we thought about the outlet organized under the loss of Mexico registered there must be a mexicali, while Otis and the New York stock exchange articles out of beta in there was somebody who cannot valores.
Alejandro: <unk> in the New York Stock Exchange I will now turn the call over to Miguel.
Miguel Matias Galuccio: Thanks, Ale. Good morning, everyone, and welcome to this early call. During the first quarter of 2024, we made good progress towards delivering on annual guidance. Solid operational and financial performance. Total production was 55,000 BOEs per day for the quarter, up 40% year-over-year on a performance basis. Oil production was 47.3 thousand barrels per day, 15% above the previous quarter, also on a performance basis. Total revenue during the quarter was $317 million, flat year-over-year.
Miguel: Thanks Ali good morning, everyone and welcome to this earnings call.
Miguel: During the first quarter of 2024, we made good progress towards delivering on annual guidance with solid operational and financial performance.
Miguel: Total production was 55000 Boe's per day for the quarter up 40% year over year on a pro forma basis oil production was 47 3000 barrels per day, 15% above previous quarter also on pro forma basis.
Miguel: Revenue during the quarter were $317 million flat year over year.
Miguel Matias Galuccio: We maintain lifting costs flat vis-a-vis the previous quarter at $4.3 per VOE, reflecting the full consolidation of our new operational model following the transfer of the conventional asset. In Q1 2024, capital expenditure was $242 million, mainly driven by 12 wells drilled and 11 wells completed during the quarter. Adjusted EVDA was $221 million, 8% above year-over-year, supported by lower lifting costs amidst stable revenue. Adjusted net income was $47 million, implying a quarterly adjusted EPS of $0.5 per share.
Miguel: We maintained lifting cost flat vis vis the previous quarter at $4 $3 per the UAE, reflecting the full consolidation of our new operational model following the transfer of the conventional assets.
Miguel: In Q1, 2024 capital expenditure was $242 million.
Miguel: Mainly driven by two well was drilled and 11 wells completed during the quarter.
Miguel: Adjusted EBITDA was $221 million.
Miguel: A portion about year over year supported by lower lifting costs amidst stable revenues.
Miguel: Adjusted net income was $47 million in.
Miguel: Implying a quarterly adjusted EPS of <unk> $5 per share.
Miguel Matias Galuccio: Free cash flow was negative at $84 million during the quarter, driven by the ramp-up of our drilling and completion pace, which will boost production over the coming quarter. The net leverage ratio at quarter end was a solid 0.58 times adjusted VDA.
Miguel: Free cash flow was negative at $84 million during the quarter driven by the ramp up of our drilling and completion pace, which we boost production over the coming quarters.
Miguel: Net leverage ratio at quarter end was a solid <unk> 58 times adjusted EBITDA.
Miguel Matias Galuccio: I will now deep dive into our main operational and financial metrics of the quarter. Total production during the quarter was 55,000 BOEs per day, a 14% increase compared to last year on a proforma basis, adjusted for the production of the transfer conventional asset. Without such an adjustment, total production grew 5% year over year, demonstrating that we have fully observed the impact of that transaction. However, on a sequential basis, total production declined slightly as the wells connected during the quarter only started impacting production in late March.
Speaker Change: I will now deep dive into our main operational and financial metrics of the quarter.
Speaker Change: Total production during the quarter was 55000 Boe's per day, a 14% increase compared to last year on pro forma basis.
Speaker Change: And by the production of the transfer of conventional assets.
Speaker Change: Without such adjustment total production grew 5% year over year.
Speaker Change: EBIT didn't seem that we have fully offset the impact of that transaction.
Speaker Change: On a sequential basis total production declined slightly.
Speaker Change: That was connected during the quarter only started impacting production in late March.
Miguel Matias Galuccio: Oil production increased 15% year-over-year on a performance basis or 7% without such adjustment; natural gas production increased 8% compared to Q1 2023 on a performance basis. In line with our annual work program, we tied in 11 new wells during the quarter, three in mid-February and eight in mid-March.
Speaker Change: Oil production increased 15% year over year on a pro forma basis or 7% without such assessment.
Speaker Change: Natural gas production increased 8% compared to Q1 'twenty two 'twenty three on a pro forma basis.
Speaker Change: In line with our annual work program with Diane 11, New wells during the quarter three in mid February and Nate in meat in March.
Miguel Matias Galuccio: This activity has little impact on Q1 production but will boost Q2 production. We are currently producing 62,000 VOEs per day and have tied in a three-well path in Baja del Palo Este last week, the first path of Q2. We forecast double-digit production growth on a sequential basis during Q2. We also reiterate our production guidance of 68,000 to 70,000 VOE per day for the year. I will now share exciting news.
Speaker Change: This activity had little impact on Q1 production, but will boost Q2 production. We're currently producing 62000 boe's per day.
Speaker Change: Diene.
Speaker Change: Three well pad in Bajada del Palo Este last week, the first part of Q2.
Speaker Change: We forecast a double digit production growth on sequential basis. During Q2, we also reiterate our production guidance of 68% to 70000 Boe per day for the year.
Speaker Change: I will now share the exciting news with.
Miguel Matias Galuccio: We recently signed an agreement to secure and import a third high-spec rig to Argentina. This rig is scheduled to start operating in our development hub during the second semester, replacing an on-call high-spec rig currently working in our operation to front-load the 2024 drilling activity. This will allow us to deliver four to eight additional new well tie-ins during 2024, in addition to the 46 wells in our current work program. We expect this to drive an improvement in our Q4 2024 production forecast to above 85,000 VOE per day.
Speaker Change: We recently signed an agreement to secure an import a thorough higher spec rig to Argentina.
Speaker Change: This rig is scheduled to start operating in our development hub during the second semester.
Speaker Change: Placing an on call high spec rigs currently working in our operation to Frontload, the 'twenty 'twenty four drilling activity.
Speaker Change: This will allow us to deliver a four to eight additional new well tie ins. During the 2024. In addition to the 46 wells in our current <unk> program.
Speaker Change: We expect this to drive an improvement in our Q4 2024 production forecast to about 85000 Boe per day bye.
Miguel Matias Galuccio: By adding one fully dedicated rig, we expect to provide an upward revision of both our activity and production guidance for 2025 once the rig is in operation. During Q1 2024, we recorded a solid improvement in our oil realization price, which was up 6% year-over-year for an average of $70.3 per barrel during the quarter. Realized oil prices were $69.3 per barrel at domestic cost. Realized oil prices from the export market were $74 per barrel.
Speaker Change: By adding one fully dedicated week, we expect to provide an upward revision of both our activity and production guidance for 2025 one.
Speaker Change: The rig is on this operation.
Speaker Change: During Q1 2020 photo we recorded a solid improvement in our oil realization prices, which were up 6% year over year for an average of $73 per barrel during the quarter.
Speaker Change: Realized oil prices were $69 $3 per barrel to domestic customers.
Speaker Change: Realized oil prices chronic poor market were $74 per barrel.
Miguel Matias Galuccio: Combining sales to international buyers and domestic buyers paying export parity, 57% of our total sales were sold at export parity. During the quarter, total revenues were stable year over year. This reflects a temporary buildup in our oil inventory compared to a reduction in Q1 2026. Lifting costs were $21.6 million for the quarter, a 28% decrease compared to the same quarter last year.
Speaker Change: Combining sales to international buyers and domestic buyers paying export parity, 57% of our total sales were sold at export parity.
Speaker Change: During the quarter total revenues were stable year over year. This reflects a temporary build up in our oil inventory compared to a reduction in Q1 2023.
Speaker Change: Lifting cost was $21 6 million for the quarter.
Speaker Change: 28% decrease compared to the same quarter last year.
Miguel Matias Galuccio: Lifting cost per BOE was $4.3, a decrease of 33% compared to Q1 2023 and flat with respect to the previous quarter. This reflects the consolidation of our new operating model, fully focused on our shale oil assets following the transfer of the conventional assets a year ago. Saturday's BDA during Q1 2024 was $221 million, an increase of 8% year-over-year, mainly driven by lower lifting costs amid flat revenues. During the quarter, we continue to deliver a strong margin.
Speaker Change: Lifting cost per BOE was for $3, a decrease of 33% compared to Q1 2023 flat.
Speaker Change: Flat with respect to the previous quarter.
Speaker Change: This reflects the consolidation of our new operating model.
Speaker Change: Fully focus on our shale oil assets following the transfer of the conventional assets a year ago.
Speaker Change: Adjusted EBITDA in Q1, 2024 was $221 million.
Speaker Change: An increase of 8% year over year, mainly driven by lower lifting cost Amit floods revenues during.
Speaker Change: During the quarter, we continued to deliver strong margins.
Miguel Matias Galuccio: Adjusted EVDA margin was 68% during the quarter, an inter-annual increase of 4% point. Net back during the quarter was $44 per EOE, a 1% increase year over year. Ajax's DVDA in Q1 2024 includes $7 million in gains from the repatriation of 20% of the export proceeds at the blue cheese swap. This was down from $81 million in the previous quarter, which reflected the large gap between the official effects and the blue chip swap effects. The sequential decrease in adjusted EVDA and margin is largely explained by this effect. However, free cash flow during the quarter was negative at $84 million.
Speaker Change: Adjusted EBITDA margin was 68, 4% during the quarter and in their annual increase of 4% points.
Speaker Change: Netback during the quarter was $44 per year.
Speaker Change: A 1% increase year over year.
Speaker Change: Adjusted EBITDA in Q1, 2024 includes $7 million in gains from the repatriation of 20% of the export proceed at the Blue chip swap.
Speaker Change: This was down from $81 million in the previous quarter, which reflected the large gap between the official effects on the blue chip swap effects.
Speaker Change: The sequential decrease in adjusted EBITDA and margin is largely explained by this effect.
Speaker Change: Free cash flow during the quarter was negative at $84 million.
Miguel Matias Galuccio: It was driven by two factors. Firstly, lower cash on operating activities due to a temporary increase in working capital. Secondly, payments of CAPEC for $148 million as we ramped up drilling and completion activities during the quarter. Cash at the period end was $152 million, as cash from financial activities generated $22 million, reflecting proceeds from borrowings of $96 million and repayment of borrowings of $45 million.
Speaker Change: This was driven by two factors firstly lower cash in operating activities due to a temporary increase in working capital.
Speaker Change: Secondly payments of Capex of $148 million as we ramp up drilling and completion activity.
Speaker Change: During the quarter.
Speaker Change: Cash at the period end was $152 million as cash from financing activities generated $22 million, reflecting proceeds from borrowings of $96 million and.
Speaker Change: And repayment of borrowings of $45 million.
Miguel Matias Galuccio: The net labor ratio stood at a very healthy 0.58 times adjusted EVDA at quarter end. I will now summarize the key takeaways of today's presentation. During Q1 2024, we deliver a strong execution of drilling and completion activity. We tie in 11 new wells in line with our annual guidance. We recorded 14% year-over-year production growth on a performance basis, driven by shale oil growth in our development. We forecast sequential double-digit growth, both in terms of production and EBITDA, in the second quarter of this year, which puts us on track to deliver on our production and adjusted EBITDA guidance for the year.
Speaker Change: Net leverage ratio stood at a very healthy five eight times adjusted EBITDA at quarter end.
Speaker Change: I will now summarize the key takeaways of today's presentation.
Speaker Change: During Q1 2024, we delivered a strong execution of drilling and completion activity, we diene 11, new wells in line with our annual guidance.
Speaker Change: We recorded a 14% year over year production growth on a pro forma basis, driven by shale oil grow in our development hub.
Speaker Change: We forecast sequential double digit growth both in terms of production and EBITDA in the second quarter of this year, which leaves us on track to deliver on our production and adjusted EBITDA guidance for the year.
Miguel Matias Galuccio: We recorded a robust improvement in realized oil prices, exceeding the $70 mark on average, boosted by higher Brent prices and by a higher share of domestic sales at export parties. Combining sales to international buyers and domestic buyers paying export parity, 57% of our total sales were at export parity. Supported by the view we have on the dynamics of our industry, both globally and domestically, and leaning into our conviction on our ability to deliver value to our shareholders, we achieved a third-highest-peg-dealing rate.
Speaker Change: We recorded a robust improvement in realized oil prices.
Speaker Change: <unk> in the $70 Marco <unk> boosted by higher grain prices and by higher share of domestic sales and export parity.
Speaker Change: Combining sales to international buyers and domestic buyer, Spain export parity.
Speaker Change: 57% of our total sales, whereas export parity.
Speaker Change: Supported by the contracted view, we have on the dynamics of our industry, both globally and domestically and are leaning into our conviction on our ability to deliver value to our shareholders. We contracted a third highest spec drilling rig.
Miguel Matias Galuccio: We forecast this will add four to eight additional new wells, incremental to our original guidance, in the second half of this year. This is expected to boost Q4 2024 production by about 85,000 VOE per day, leaving us well-prepared to potentially increase our production guidance for 2025. Before we move to Q&A, I would like to thank our investors for their continued support. And also, I would like to thank the Vista team for their hard work during the quarter, which leaves us well prepared to achieve our annual target. Operator, please open the line for Q&A.
Speaker Change: We forecast these will add four to eight additional new with incremental to our original guidance in the second half of this year.
Speaker Change: This is expect to boost Q4 2024 production about 85000 Boe per day, leaving us well prepare to potentially increase our production guidance for 2025.
Speaker Change: Before we move to Q&A I would like to thank.
Speaker Change: Our investors for their continued support.
Speaker Change: And also I would like to say the Vista team for their hard work during the quarter, which leaves us well prepared to achieve our annual targets.
Speaker Change: Operator, please open the line for Q&A.
Operator: Thank you. As a reminder to ask a question, please press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. Please stand by while we compile the Q&A list. Our first question comes from the line of Bruno Montanari from Morgan Stanley.
Speaker Change: Thank you as a reminder to ask a question. Please press star one one on your telephone and wait for your name to be announced to withdraw. Your question. Please press star one one again.
Speaker Change: Please standby, while we compile the Q&A roster.
Speaker Change: Our first question comes from the line of Bruno Montanari from Morgan Stanley.
Bruno Montanari: Good morning, everyone. Good morning Miguel, and Alejandro.
Bruno Montanari: Good morning, everyone. Good morning, Miguel Alejandro Thanks for taking my questions I wanted to explore that.
Miguel Matias Galuccio: Thanks for taking my questions. I wanted to explore production and cash flows. On production, very exciting news with the third rig coming in the second half of the year. So how should we think about the incremental number of ads or wells into 2025, assuming that the rig operates at the expected specifications? Is this space of four to eight additional wells per quarter sustainable, or can it be higher? So any call you can give on the contribution of the rig on an ongoing basis would be super helpful.
Bruno Montanari: Production and cash flows.
Bruno Montanari: And production is very exciting news.
Bruno Montanari: The third rig.
Speaker Change: The second half of the year. So how should we think about the incremental number of beds or warehouse.
Speaker Change: 2025, assuming that the rig.
Speaker Change: Right.
Speaker Change: At the expected specifications is this space of four to eight additional wells per quarter sustainable or can it be higher so any color you can give on the contribution of the rig.
Speaker Change: On an ongoing basis would be super helpful.
Miguel Matias Galuccio: And then on cash flows, there was some noise on the cash flows for the first quarter on the back of the working capital situation. So if you could comment on the expectation of working capital release during the second quarter of 2024 and how to think about working capital for the full year, it would also be extremely helpful. Thank you very much.
Speaker Change: And then on cash flows.
Speaker Change: On the cash flow for the first quarter on the back of the working capital situation. So if you could comment on the expectation of working capital release during the second quarter of 2024, and how to think about working capital for the full year. It would also be extremely helpful. Thank you very much.
Miguel Matias Galuccio: Hi Bruno, how are you? Thank you very much for your question. Look at what I mean, starting from the production point of view. So we finished last year with 56 in Q4. And we designed the plan for this year to have around average 55,000 barrels per day in Q1 2024. That is what we got. In the plan, we said that we were going to have an average of 68 to 70 barrels of oil per day for 2024, and that plan didn't consider adding a high-spec ferric. How do we see things today?
Speaker Change: Hi, how are you. Thank you very much for your question.
Speaker Change: Look at studies from the production point of view.
Speaker Change: So we finished last year with 56% in Q4.
Speaker Change: And we design the plan for this year.
Speaker Change: To have our own average 55000 barrel per day in Q1 2024 that is what we get.
Speaker Change: In the plan, we said that we are going to have an average of 68% to 70 barrels of oil per day for 2024.
Speaker Change: On that.
Speaker Change: That plan didn't consider adding a higher spec rig.
Speaker Change: How we see things today.
Miguel Matias Galuccio: So first of all, I will say that we are entering Q2 with a very good production starting point. If you take the production of April 23, that was the last one that I checked, we were producing 62,000 barrels of oil per day. And to finish, with an average of 85,000 barrels per day. So, of course, we are not going to give guidance for Q2 and Q3, but you guys can make the numbers, OK? We are starting Q2 with 62, and we want to finish with an average of 85 in Q4. This is factored in the third week that we are adding today.
Speaker Change: So first of all I would have said we are entering Q2.
Speaker Change: Hey, good production.
Speaker Change: Starting point if you take the production of April 23 that was the last one that they check we were producing 62000 barrels oil per day.
Speaker Change: And we expect to finish.
Speaker Change: Q4, with an average of 85000 barrels per day.
Speaker Change: So of course, we are not going to give guidance in Q2 on Q C. Where you guys can make the number okay. We are starting the Q2 with 62 and we want to finish an average of 85 in Q4. This is factored in the fabric that we are adding today.
Miguel Matias Galuccio: When you look at starting this quarter with 62 and what we have coming in line based on the activity that we have, we have Bajada El Palo Este, 22. That is a very good part of three wells that have yet not reached peak oil. We have Bajada El Palo 23, that also shows very good production. It's a part of five wells, yet it has reached peak oil. We have Bajada del Palo Oeste 24 that is in flow back.
Speaker Change: When you look at.
Speaker Change: Starting this quarter with 62 and what we have.
Speaker Change: Coming in in line based on the activity that we have we have bajada del Palo Este 'twenty two that is.
Speaker Change: Very good thought of three words that yet reached peak oil.
Speaker Change: We have a hurdle Palo 'twenty three.
Speaker Change: That also shows a very good production is set by the fight with yet.
Speaker Change: Has reached peak oil.
Speaker Change: A highlight Palo <unk> 24 that is in flow back and we have a highlight Palo Este 25 that is going to be dialing in may and probably therapy shows an oil issue.
Miguel Matias Galuccio: And we have Bajada del Palo Oeste 25 that is going to be tied-in in May and probably start to show some oil in June. Saying all that, I feel confident with the production that we are seeing and with the plan that we have. Of course, 2024 is a challenging year. Okay, we are basically putting the VAR in terms of growth production very high. But it's nothing that we have done before.
Speaker Change: So.
Speaker Change: Saying all that I feel.
Speaker Change: I feel confident with the production that we have seen in with the plan that we have.
Speaker Change: Of course, 2000 2046 challenging year again, we are we are basically full.
Speaker Change: The board in terms of growth production Betty Hi, It is nothing that we have.
Speaker Change: Done before and we have a track record of delivering and we will deliver this year as well.
Miguel Matias Galuccio: And we have a track record of delivering, and we will deliver this year as well. The question will probably be for 2025. We signal that we are going to have 85,000 average for 2025. Probably in the future, we should look at that guidance now that we are adding that theory.
Speaker Change: The question will be probably for 2025.
Speaker Change: We signaled that we are going to have 85, south in a rush.
Speaker Change: For 2025.
Speaker Change: Probably in the future we should look at that guidance now that we are in that category.
Bruno Montanari: Going to cash flow. So in 2023, we spend $760 million on CAPEX, and we end up the year with a cash flow of around $30 million and with a realized price of $66.7 per barrel. Our 2024 plan was for a capex of $900 million, and we expect a cash flow of $100 million. And we guide pricing between $65 and $70. We have finished Q1 with more activity, $240 million in CapEx. A negative cash flow of $84 million that, as you mentioned, has the effect of the export cargo that came late.
Speaker Change: Going to cash flow.
Speaker Change:
Speaker Change: So 2023, we it's been seven countries 60, 760 million Capex and we ended up the year with a cash flow $30 million.
Speaker Change: And with a realized price of $66 seven.
Speaker Change: But a lot of it.
Speaker Change: Our 2024 plan was of a capex of $900 million.
Speaker Change: We expect the cash flow fit one country.
Speaker Change:
Speaker Change: We guide.
Speaker Change: Pricing between $65 70.
Speaker Change: We have finished Q1 with more activity $240 million of Capex.
Speaker Change: The negative cash flow of $84 million.
Speaker Change: As you mention the effect of the export cargo that came late and that effect is an effect of $42 million and we have realized prices of $70 million.
Bruno Montanari: And that effect is an effect of $42 million, and we have realized prices of $70 million. With the plan of adding a third rig, we will have an additional capex between $150 million and $200 million. So we expect, or I am expecting, and that also will depend on the prices that we get, to probably have negative cash flow for the first semester. And we will probably recover positive cash flow for the second semester toward the end of the year. This is our current view. I hope I have answered your question, Bruno.
Speaker Change: With the plan.
Speaker Change: Adding a third rig we will have an additional capex between $150 million and $200 million.
Speaker Change: So we expect OEM effecting that.
Speaker Change: That also will depend on the prices that we get to have probably negative cash flow for the first semester.
Speaker Change: We will drill already recovered a positive cash flow for the second semester toward the end of the year. This is our current view.
Speaker Change: I hope I have answered your question Bruno.
Bruno Montanari: Sure. Thank you very much you bet.
Speaker Change: You're welcome.
Speaker Change: Thank you one moment far next question.
Miguel Matias Galuccio: Sure. Thank you very much, Miguel.
Speaker Change: Our next question comes from the line of Daniel Guardiola from BTG Pactual.
Operator: Thank you. One moment for our next question. Our next question comes on the line from Daniel Guardiola from BTG Pactual. Hi, good morning.
Speaker Change: Okay.
Daniel Guardiola: Hi, good morning.
Daniel Guardiola: Thank you for taking my questions.
Daniel Guardiola: I have a couple of questions. So my first one is related to production.
Daniel Guardiola: Good morning, and thank you for taking my questions. I have a couple of questions, so my first one is related to production. I see you have this goal to basically increase production by Q4 by roughly 30,000 barrels of oil per day. And I wanted to ask you, Miguel, this is by far the most aggressive interannual growth in production that this company has experienced or even experienced so far. Which ones do you think are the main challenges that you're going to have to face trying to reach this new level?
Daniel Guardiola: I see you have this this this goal to basically increase production.
Daniel Guardiola: But the Q4 by roughly 30000 barrels of oil per day, and I wanted to ask from Yale.
Daniel Guardiola: This is by far the most aggressive internal growth and production that is company have experienced or are you an experienced so far.
Daniel Guardiola: Charles do you think are the main challenges that you are going to have trying to reach these new level.
Miguel Matias Galuccio: In connection with production, if I'm not mistaken, you are expecting additional pipeline capacity in the second half of the year, but I think it's not going to be enough for you to actually evacuate 100% of this incremental production through pipelines. So I guess you're going to increase the usage of trucking. And in that sense, I wanted to know the split that you expect between trucking and pipelines and the potential effects on costs of increasing trucking evacuation capacity.
Charles: In connection with production.
Charles: I'm not mistaken you are expecting additional pipeline capacity towards the second half of the year.
Charles: But I think he is not going to be enough for you to actually evacuate 100% of this incremental production through pipeline. So I guess youre going to increase the usage of trucking and in that sense I wanted to know the split that you expect between trucking and pipelines and the potential effects on cost of increase in trucking evacuation capacity.
Speaker Change: So thats in terms of production and if I may Joseph squeeze another one on east is related to the exports. We saw during the Q a significant decline in exports as a percentage of total volume.
Miguel Matias Galuccio: So that's in terms of production, and if I may just squeeze another one in, and it's related to exports. We saw during the Q a significant decline in exports as a percentage of total volume sold. So I wanted to know if you could share with us what happened during the Q and what your expectations are for the upcoming quarters.
Joseph: Volumes sold so I wanted to know have you kind of share with us what happened during the Q and what are your expectations for the upcoming quarters.
Joseph: Right.
Joseph: Thank you Daniele for your question and yes, I will agree with you that we have a challenging.
Joseph: <unk>.
Joseph: A challenging year ahead and demo production. Nevertheless, I will restate, what I said to renew I feel very comfortable entering with 62000 barrel per day aiming for 85.
Daniel Guardiola: Thank you, Daniel, for your question. And yes, I will agree with you that we have a challenging, a difficult year ahead in terms of production. Nevertheless, I will restate what I said to Bruno.
Joseph: <unk> seen the first.
Joseph: Results of the pilot we have drilled a feel super confident and also you have to factor in that.
Miguel Matias Galuccio: I feel very comfortable entering with 62,000 barrels per day, aiming for 85, and seeing the first results of the pad that we have drilled, I feel super confident. And also, you have to factor in that the 62,000 barrels per day that we produce come fully from unconventional wells. So that means that in the last four to three years,
Joseph: The 62000 barrels per day to day that we produce gum fully flown unconventional wells.
Joseph: So that means that in the loss.
Joseph: For two three years.
Joseph: The best Athene Manish to develop and to produce 62000 barrel per day, so for us aiming to add another 20.
Miguel Matias Galuccio: The Vista team has managed to develop and produce 62,000 barrels per day. So for us, aiming to add another 20 is not much different than we have done before. It's gonna be a challenging year, but we have the equipment and the operational capacity and the talent to make it happen. Back to your second question. Yes, tracking, as you said, is something that we are going to use this year. As you know, we knew that Oldeval was going to be late.
Joseph: It's not much different that we have done before.
Joseph: Going to be a challenging year, but we have the equipment on.
Joseph: On the operational capacity and talent to make it happen, but to your second question yes.
Speaker Change: Yes tracking as you said is something that we are going to use. This year you know we knew that all about.
Speaker Change: What's going to be late it was scheduled for Q1 2024 and will be delivery on Q4, So we factored in our guidance in our planned expenses to cover that.
Miguel Matias Galuccio: It was scheduled for Q1 2024 and will be delivered in Q4. So we factored in, in our guidance, in our plan, the expenses to cover that. So we created a tracking plan that basically calls for a cost between $10 and $12 per barrel. Of course, Q1, we will probably track around 2000 barrels per day. In Q2, we think that number will probably be closer to 9. And in Q3, it will be up to 12,000 barrels per day. In the guidance, we factor in $25 million expenses related to the costs of tractors.
Speaker Change: So we create racking plan b.
Speaker Change: Basically called for a cost between 12, and 12 10 and $12 per barrel.
Speaker Change: Of course Q1, we we were probably tracking.
Speaker Change: Tracking that on 2000 barrel per day.
Speaker Change: Q2, we're seeing that.
Speaker Change: A number would be probably closer to 9% in Q3, it will have it will be up to us.
Speaker Change: South embarrass per day.
Speaker Change: In the guidance, we factored in $25 million of expense.
Speaker Change: This is related to those cost of trucking.
Miguel Matias Galuccio: Your third question, if I remember correctly, was set for volume, export volume in Q1. We have 41% of volume that was directly exported. And we have a new market dynamic in the domestic market, where 60% of the domestic volume is sold at export parties. So we sold basically 57% of our volume at export parity. In Q2, we believe that 50% will be directly volume that is going to be exported. And probably the domestic volumes, we are basically forecasting that could be around 10%. So 60% of our volume will be sold at export parity. This is what we are forecasting.
Speaker Change: Your third question, if I remember properly will set per volume.
Speaker Change: Port volume in Q1.
Speaker Change: We have 41% of volume that we're directly to export and we have a new market dynamic.
Speaker Change: In the domestic market, where 60% of the domain.
Speaker Change: Volume, where we're sold at export parity.
Speaker Change: So we sold basically 57% of our volume to export parity Q2, we believe that 50%.
Speaker Change: It will be directly volume they are going to be export.
Speaker Change: Probably the domestic volumes.
Speaker Change: Basically forecasting that we will be around 10% so 60% of the our volume will be sold at export parity. This is what we are forecasting.
Daniel Guardiola: Thank you very much, Miguel. You're welcome, Daniel.
Speaker Change: Thank you very much for me Jeff.
Speaker Change: Canadian.
Speaker Change: Thank you.
Operator: One moment for our next question. Our next question comes from the line of Tasso Vasconcellos from UBS.
Speaker Change: One moment for our next question.
Tasso Vasconcellos: Our next question comes from the line of docile Vasconcellos from UBS.
Tasso Vasconcellos: Hey everyone, thanks for taking my question. I think I have one here on my side.
Tasso Vasconcellos: Hey, everyone. Thanks for taking my question.
Vasconcellos: I think I have one here on my side.
Miguel Matias Galuccio: We have seen increased competition in the past years here in Brazil coming from the assets sold by Petrobras, which led several independent players to increase their footprint in the industry, and of course, requiring additional equipment, services, employees, and all of that led to competition in the industry, right? What are Vista's expectations for this investment process that we're seeing from YPF and probably from some other players? Do you believe we could see higher competition in the industry in Argentina either this year or in the upcoming ones? How do you see this environment growing in Argentina? This is my question. Thank you.
Vasconcellos: <unk> seen an increased competition the best Youll see Brazil coming from the assets sold by Petrobras, which led several independent players to ingredients.
Speaker Change: The industry and of course, requiring additional quick.
Vasconcellos: Quick on that services employees and all of that led to a higher competition in the industry right.
Vasconcellos: What are the expectations for divestment process that we're seeing from IPF and probably from some other players do you believe we could see a higher competition in the industry.
Vasconcellos: Either this year, it's this year or in the upcoming ones. How do you see this environment growing Argentina. This is my question. Thank you.
Miguel Matias Galuccio: Thank you, Tasso, for the question. The short answer probably is yes.
Speaker Change: Thank you for the question.
Speaker Change: So.
Speaker Change: The short answer is probably yes first of all I think.
Tasso Vasconcellos: First of all, I think the rationalization of the portfolio that YPF is going through, and basically, we went through the same rationalization of the portfolio, knowing that the unconventional opportunity, the main opportunity for us, where the scale is and where the margin is. I believe it's a very rational decision and it's a good path that YPF is taking in that direction, and I applaud them for that. And yes, I think that will create more activity in the basin.
Speaker Change: The.
Speaker Change: The rest of the 90 station of the portfolio that <unk> is going through and basically we went through the same rationalization of portfolio knowing that.
Speaker Change: The unconventional opportunity the main opportunity for us where the scale is and where the margin is.
Speaker Change: I believe this is a very rational decision.
Speaker Change: Good but that <unk> taken in that direction.
Speaker Change: And I applaud them for that.
Speaker Change: Yes, I think that with more activity in the basin.
Tasso Vasconcellos: It will probably attract more investment toward conventional fields that today, for the one that holds both in their portfolio, cannot compete for capital allocation. And if you're referring to the effect that we created within the service sector, yes, I think there will be more demand for services. And I will add to what you said that the other effect that you will have is that Bacamorte is growing. We see more activities; we see basically more people asking for rigs and frac fleets and so on.
Speaker Change: Probably.
Speaker Change: There are more investment towards conventional fields that today for the one that hold both in their portfolio.
Speaker Change: And not compete for capital allocation.
Speaker Change: <unk>.
Speaker Change: And if you're referring to the fact that we created within the service sector, yes, it will be more demand for services.
Speaker Change: I will add to what you said that the other effect that you have is that by commodity is growing.
Speaker Change: We see more activities we see.
Speaker Change: Basically more people asking for rig and Frac fleet and so on.
Tasso Vasconcellos: In that sense, I believe we have a competitive advantage compared with the rest because, from day one, we have adopted a model called One Team where we have made our main service providers partners, partners mean that they've been working with us nonstop since day one, and we basically give 100% of the activity to them. So that gives us a preferential relationship with those people. We have no problem adding equipment during the good times and during the bad times.
Speaker Change: In that sense I believe we have.
Speaker Change: Our competitive advantage compared with our rates.
Speaker Change: We have.
Speaker Change: From day one.
Speaker Change: Adult.
Speaker Change: Model.
Speaker Change: <unk> team, where we have made our main service provider.
Speaker Change: Dennis.
Speaker Change: It doesn't mean that they've been working with us nonstop.
Speaker Change: Since day one.
Speaker Change: Uh huh.
Speaker Change: We basically.
Speaker Change: Deep.
Speaker Change: 100% of the activity to them.
Speaker Change: That gave us a preferential relationship with the people we have got no problem to add equipment and during the good times and during the bad times and I think this is.
Tasso Vasconcellos: And I think this is a clear example of that, the highest per rig that we are adding with neighbors basically this year. So yes, I think we'll be under more pressure, but I think we will be okay.
Speaker Change: A clear example of that.
Speaker Change: Yes, Barry that we are adding we enable.
Speaker Change: Basically this year so.
Barry: Yes, I think it will be more pressure, but I think we would be okay.
Miguel Matias Galuccio: All right, that's clear. Thank you.
Barry: Alright, Thats clear thank you.
Speaker Change: Thank you.
Operator: One moment for our next question. Our next question comes from the line of Andres Cardona from Citi.
Speaker Change: One moment for our next question.
Speaker Change: Our next question comes from the line of Andreas Cardona from Citi.
Andres Cardona: Hi Miguel. Good morning.
Andres Cardona: I'm good good morning, I have two questions coming back to the free cash flow.
Andres Cardona: I have two questions coming back to the free cash flow concern that Bruno expressed before. There was a second item that, at least for us, was surprising: the advanced payment for mid-swing expansion. So, could you please give us some context about...
Speaker Change: Concern.
Andres Cardona: Bruno expressed before there was a second item at least for us.
Andres Cardona: So pricing the adviser.
Andres Cardona: <unk> payments were made through an expansion. So could you please give us some context.
Miguel Matias Galuccio: The outlook for these potential expenses and how they will be deployed over the coming quarters. I understand there is a commitment of close to $150 million, out of which, close to 60 million have been deployed, so I wanted to understand what we should expect on this front to be more accurate on the free cash flow forecast. The second point I wanted to understand is... with Brent at $88 per barrel, and we have seen the big effort the industry has made to improve domestic prices, domesticization prices.
Andres Cardona: The outlook for these potential expenses, how would be deployed over the coming quarters I understand there is a commitment of close to $150 million out of which close to.
Andres Cardona: Close to $60 million have been deployed so I wanted to understand what should we expect.
Andres Cardona: On this front just to be more accurate on the on the free cash flow forecast.
Andres Cardona: The second point I wanted to understand knees.
Andres Cardona: Brent up $88 per barrel and we have seen the week before the industry has gone to.
Andres Cardona: To improve the domestic prices.
Andres Cardona: Mr utilization prices.
Miguel Matias Galuccio: What are you seeing in the second quarter? What should we expect going forward? Do you expect a slowdown on this following trend that we have seen in the first quarter? And perhaps the last question is... Going back to the third Rick point, well, what should we expect for 2025 will be high for the full year yet? We decided, just trying to get some color about what to expect for the next year.
Speaker Change: What are you seeing in the second quarter, what should we expect going forward do you expect any slowdown on the following trends that we have seen.
Speaker Change: In the first quarter.
Speaker Change: And perhaps.
Speaker Change: The last question is.
Speaker Change: Going back to the third.
Speaker Change: Rick.
Speaker Change: Don.
Don: Well what should we expect for 2025 will be higher for the full year. Two we decide just trying to get some color about what to expect for the next year.
Miguel Matias Galuccio: Hi Andres. Thank you for your questions. One again, first of all, is starting from the free cash flow. So I don't think Bruno expressed that he had a concern.
Speaker Change: Hi, Andrew.
Andrew: Thank you for your questions. Once again first of all is starting from the free cash flow. So.
Speaker Change: I don't think Bruno spreads have are concerned we don't have a concern either.
Miguel Matias Galuccio: We don't have a concern either. We can, basically, be be, we've been growing with our own cash flow generation. And we can continue growing toward the third rig using our own cash flow. So I mean, we are in that same privilege compared with other developers of unconventional resources.
Speaker Change: We can basically be being we've been growing with our own cash flow generation and we can continue growing towards the <unk> using our own cash flow. So I mean, we are in that Sen privilege compare with other developers of unconventional resources.
Miguel Matias Galuccio: As I said before, first semester, of course, because due to the activity, how it picked up during Q2 and Q3, we will have negative cash flow, and we will have positive cash flow toward the end of the year. Also, next year, and I will probably take advantage of answering your question on the third rig. I think you can factor it in that we're going to have that third rig fully operational by 2025. Back to the question from Mainstream.
Speaker Change: As I said before firstly method of course, because due to the activity.
Speaker Change: During Q2 and Q3, we will have a negative cash flow and we will have positive towards the end of the year also.
Speaker Change: Next year on broadly I take advantage of answering your question on the third rig.
Speaker Change: I think you can factor it in that we're going to have that Rick.
Speaker Change: Fully during 2025.
Speaker Change:
Speaker Change: To the question from midstream.
Miguel Matias Galuccio: I'm probably putting this in context, so the additional device capacity that was tendered was 315,000 barrels per day, from which we secured 31,000 of those, and Inote from also the same volume will secure 37,000 barrels per day. We pre-paid $58 million for both, and in Q2, Q3, and Q4, we should have additional cash calls expenditures of around $70 million, $40, $20, and $10, if I remember correctly, related to your question about domestic pricing. Unknown Speaker, So in Q1 2024, we saw a domestic price of $66. The export parity was around $79 with a brand of $80 per barrel going forward. We are assuming that 60 feet should be the floor.
Speaker Change: Probably bring context, so they buy capacity additional capacity.
Speaker Change: Was tender was 315000 barrels a day from which we secured 31000 of those are not from also the same volume we secured 37000 barrels per day.
Speaker Change: We prepaid $50 million for Bose on Q2, Q3, and Q4, we should have additional.
Speaker Change: Cash calls expenditures of around $70 million.
Speaker Change: 42, <unk> 10, if you remember properly.
Speaker Change: Related your.
Speaker Change: Related to your question.
Speaker Change: About domestic pricing.
Speaker Change: So Q1 2024, we saw domestic prices of $66.
Speaker Change: The property was around 79%.
Speaker Change: We the brand of $80 per barrel.
Speaker Change: Going forward.
Speaker Change: We are assuming that 60 feet to be the Florida.
Miguel Matias Galuccio: Refinance should gradually upgrade prices toward export parity since there is no regulation in Argentina today to maintain the domestic price fixed. Refineries also, as I mentioned before, have a new dynamic. The consumption, the local consumption, has dropped, and they are starting to export refined products. And therefore, they are willing to pay for that additional volume, export parities. In fact, one third of our local volume was recognized as export parities.
Speaker Change: Refiners should gradually upgrade prices toric property since there is no regulation in Argentina to date to maintain the domestic pricing fix.
Speaker Change: Refineries also as I mentioned before have a new dynamic.
Speaker Change: The consumption the local consumption is half drop on.
Speaker Change: They are starting to export refined products and therefore, they're willing to pay.
Speaker Change: For that additional volume export parity is one third of our local volume was recognized for quality.
Miguel Matias Galuccio: So, uh, I believe we should see local prices coming up. I don't remember if you have an additional question. I think there were three of them answered. No, no. Those were the questions, Miguel. Thank you for the answer. Thank you, Andres.
Speaker Change: So.
Speaker Change: I believe we should see look at prices.
Speaker Change: Coming up.
Speaker Change: I don't remember if you have additional question and I think there were three of them answer those were the questions. Thank you for the answers. Thank you Andreas.
Speaker Change: Thank you.
Operator: One moment for our next question. Our next question comes from the line of Marina Mertens from Latin Security.
Speaker Change: One moment for our next question.
Speaker Change: Our next question comes from the line of Martin Martin from Latin Securities.
Marina Mertens: Hi, good morning. Thanks for taking my question. So, during the quarter, we saw inflation coming up by 56%, while effects went up by only 7%. However, listing costs remain mostly unchanged. Are you seeing any pressure on the cost side due to these dynamics? And what are you expecting for the remainder of the year?
Martin Martin: Hi, good morning, Thanks for taking my question.
Martin Martin: During the quarter, we saw inflation coming up by 56% wireless went up by only 7%. However, it lifting costs remain low TNK.
Martin Martin: Any pressure on the cost side. It does this dynamic and what are you expecting for the remainder of the year.
Miguel Matias Galuccio: Thank you, Marina, for your question. Yes, I mean, what you're asking mainly has a dynamic impact on our lifting costs. So from the evaluation, we saw a positive impact on our lifting costs that had an impact that we captured in December. And you saw our $4.3 per barrel lifting costs. And in Q4, we're already reflecting that saving in Q1. We basically, when in Q4, we got only one man the effect of that devaluation. We captured that in the full quarter during Q1 2024, and that allows us to have the number that we have today, which is 4.3.
Speaker Change: Thank you Martina for your question.
Speaker Change: Yes, I mean.
Speaker Change: Well you are asking mainly.
Speaker Change: Dynamic or any bugs in our lifting cost throne. So from the devaluation, we saw a positive impact in our lifting costs.
Speaker Change: Uh huh.
Speaker Change: <unk> have an impact, but we captured in December.
Martin Martin: You saw our $4 $3 per barrel lifting cost.
Martin Martin: In Q4.
Martin Martin: Were already reflecting that savings in Q1, we.
Martin Martin: We basically.
Martin Martin: Then in Q4, we got only one month of effect of that devaluation.
Martin Martin: We capture that in the fourth quarter. During Q1 2024 that allow us to have the number that we have today that is four three so part of those savings really offset that.
Miguel Matias Galuccio: So part of the saving really, we are upset that by higher activity, we have slightly lower production in Q4 2023 and a bit of cost inflection during the quarter. So if you look at our lifting cost going forward, I think you should go back to the guidance that we have that is $4.5 for the year. We will continue to have effects of inflation with a flat effect. Nevertheless, we plan to almost double the production that we had at the beginning of the year. So that will dilute lifting costs. So if I had to take a guess, I would probably, with ups and downs, move closest to the $4.5 per barrel per BOE that we have forecasted and guided.
Martin Martin: By higher activity.
Martin Martin: We have a slightly lower production in Q4 2023 on a bit of cost inflation during the quarter.
Martin Martin: So if you look at.
Martin Martin: Our lifting costs going forward I think.
Martin Martin: You should go back to the guidance that we have that is $45 for the year.
Martin Martin:
Martin Martin: We will continue having.
Martin Martin: The effects of the inflation.
Martin Martin: With a flat effect.
Martin Martin: Nevertheless.
Martin Martin: We plan to Oh.
Martin Martin: Almost double the production that we have at the beginning of the year. So.
Martin Martin: Will dilute lifting costs. So if you got to take a guess I will I will probably.
Martin Martin: Up and downs move closer to the $4 $5.
Martin Martin: But a viral video that we have.
Martin Martin: That we have.
Speaker Change: Got it.
Speaker Change: Thank you.
Speaker Change: Yeah.
Operator: One moment for our next question, which comes from the line of Alejandro Demichelis from Jefferies.
Speaker Change: Thank you.
Speaker Change: One moment for our next question.
Speaker Change: Our next question comes from the line of Alejandro de Michelle is from Jefferies.
Alejandro Demichelis: Yes, good morning. Thank you very much for taking the time to answer my questions. I have two questions, if I may, please. The first one is about that extra rig capacity that you mentioned, Miguel. How are you thinking about splitting the rig capacity between the different fields? Is this kind of, you know, going to be focused entirely on the BPO, BPE kind of hub, or should we expect something in the less developed areas? That's the first one. And then the second question is, last quarter, you mentioned potential M&A activity or at least that you were looking at some of the assets in Argentina. So how are you thinking about that today?
Speaker Change: Yes. Good morning. Thank you very much for taking my questions I have two questions. If I may. Please the first one is on that extra rig capacity that you mentioned.
Speaker Change: How are you thinking about splitting the rig capacity between the different fields is kind of going to be focused entirely into the <unk> kind of have or should we expect something into the less developed areas. That's the first question and then the second question is lost.
Speaker Change: Last quarter, you mentioned about potential M&A activity or is this what you were looking at some of the assets in Argentina. So how are you thinking about that today.
Miguel Matias Galuccio: Thank you very much for the question. So the main activity continues to be focused on the development hub, that is Aguada Federal, Baja del Palo Oeste, and Baja del Palo Este.
Speaker Change: Thank you very much for your question.
Speaker Change: So they may activity continued to be focused on the development up there is our favorite overhaul below it.
Speaker Change: By the way.
Speaker Change: Those three blocks continue to be.
Miguel Matias Galuccio: Those three blocks continue to be the main target of our development. Related to an additional rig, well, we just brought in a new one. As you know, we are ambitious. So I will not discount that at some point in time, we will dream of adding more. But for the moment, I think we should consider that we will run full speed with three rigs. And 25 will consolidate that activity right from the beginning.
Speaker Change: The main target of our development.
Speaker Change: Related to an additional rig well wishes.
Speaker Change: A new one.
Speaker Change: You know we're ambition so.
Speaker Change: I would not discount at some point of time within the grid, adding more but for the moment I think we should consider that we will run full speed with <unk> and 'twenty five we'll consolidate that activity right from the beginning.
Miguel Matias Galuccio: So it will be another year of growth. As regards M&A activity, as you know, we are participating in the Exxon tender. As I said before, it's a very competitive tender. It's not that we are desperate for more resources, but we are participating, and we will see what happens from there. We have a hub of further development in the north that is not in our plan yet but will come to realization at some point in time. So that is the view I can give you so far.
Speaker Change: So it will be another year of growth.
Speaker Change: Ready to M&A activity as you know we are participating in the Exxon tender.
Speaker Change: As I said before is a very competitive tender.
Speaker Change: It's not that we are separated for more resources.
Speaker Change: But we are we are participating in we see will happen from there.
Speaker Change: Sure.
Speaker Change: A hub of further development in the north that is not in our plan.
Speaker Change: Yet, but at some point of time will come to realization. So the DWA can give you so far.
Alejandro Demichelis: Great. Thank you. You're welcome.
Speaker Change: That's great. Thank you.
Speaker Change: Thank you.
Operator: One moment for our next question, which comes from the line of Oriana Covault from Balance.
Speaker Change: One moment for our next question.
Speaker Change: Our next question comes from the line of Marianna cobalt from Badlands.
Oriana Covault: Hi, thanks for taking my questions. This is Oriana Covault with Valence.
Marianna Cobalt: Hi, Thanks for taking my question. This is identical as we balance I have.
Oriana Covault: I have maybe one brief clarification and follow-up. So, the first one with regard to the contracted third week that is expected for the second half. Just to clarify, are you expecting any CAPEX revisions due to this increased activity, or was this already contemplated in your annual budget? I'm sorry if you already mentioned that, but I think I missed it.
Marianna Cobalt: Maybe one brief clarification and a follow up so the first one with regards to the.
Speaker Change: Contract.
Speaker Change: <unk>.
Speaker Change: Any expected for the second half just to clarify are you expecting any capex revisions to this.
Speaker Change: Italy increased activity.
Speaker Change: And what is already contemplated in your annual market sorry, if you already mentioned that but I think I missed it.
Miguel Matias Galuccio: So, Oriana, yes, I mean, it's what I mentioned before. So you should consider that with the third RIC, we will upgrade the $900 million of CAPEX that we have by $150 to $200 million additional due to the new RIC. And of course, that increased production. So we are now aiming for an average of 85,000 barrels of oil per day for the fourth quarter.
Speaker Change: So yes, I mean, the is what I mentioned before so you should consider that with the third rig.
Speaker Change: We will upgrade the $900 million capex that we have in country $50 million to $200 million additional.
Speaker Change: Due to the new rig.
Speaker Change: And of course that increased production. So we are now aiming to an average of 85000 barrels of oil per day for the fourth quarter.
Oriana Covault: Understandable. And maybe just following up on the delays that you are seeing in Old El Val, can you remind us what Vista's current evacuation capacity is and how do you expect that these delays from Old El Val will impact your production guidance that you provide in the earnings presentation? It seems that it continues to ramp up gradually towards above 85 million barrels of oil equivalent by the end of the year, but just how should we think of current evacuation capacity and the increased Old El Val by year-end?
Speaker Change: Understood and maybe just.
Speaker Change: Following up on the on the delays that you have seen our deadline.
Speaker Change: Can you remind us what is this does kind of equation capacity.
Speaker Change: How do you expect.
Speaker Change: So all in right.
Speaker Change: Impact your production guidance that you're providing in the earnings presentation. It seems that it continues to ramp up.
Speaker Change: Gradually towards above 85 million barrels of oil equivalent by the end of the year, but.
Speaker Change: Just how should we think of kind of equation capacity and the increased uninvited.
Miguel Matias Galuccio: Yes, Oriana, thank you for the question. So first of all, I mean, just to clarify, there will be no impact. I mean, we have enough evacuation capacity for the year, so we will not have any negative impact on our production plan due to the evacuation. Our actual evacuation capacity is 50,000 barrels per day. We have tracking capacity. That means we can track 20,000 barrels per day, and we use that based on what is needed.
Speaker Change: By year end.
Speaker Change: Yes. Thank you for the question so.
Speaker Change: First of all I mean, just to clarify has no impact.
Speaker Change: Nowhere alkylation capacity for the year. So we will not have any negative impact in our production plan due to the equation our actual evacuation a 50000 barrel per day, we got the racking capacity that means.
Speaker Change: We can drive 20000 barrel oil per day, and we use that based on what is needed.
Miguel Matias Galuccio: And all the value we add, another 15,000 barrels per day toward the end of the year is aimed for October. In 2025, we will have the second phase of Oil del Val, that for us will mean another 15,000 barrels per day of additional capacity. So 50 plus 20 plus 15, you have there, right there, 85 that we have for 2024.
Speaker Change: And on the value we add another 15000 barrels per day.
Speaker Change: Towards the end of the year.
Speaker Change: Aimed for October.
Speaker Change: 25, we'll have the second phase of all involved that for US will mean, another 15000 barrel oil per day of additional capacity. So 50, plus two any plus 15.
Speaker Change: You have there.
Speaker Change: There are 85.
Speaker Change: That we have for 2024.
Oriana Covault: Perfect, that's very clear. And just one last one, seeing the price evolution in the local market and your ability to sell volumes at export parity prices, should we think of or expect any meaningful deviation from the export mix target, given that you're actually able to place some of these volumes at export parity locally?
Speaker Change: Okay, that's very clear and just one last one seen the pricing evolution in the local market and your ability to sell volumes.
Speaker Change: On export parity pricing should we think of.
Speaker Change: Thanks, any meaningful deviation from the export mix targets seem that you have.
Speaker Change: Actually being able to place some of these volumes had excellent party export parity locally.
Miguel Matias Galuccio: Really, I mean, we are seeing, as I mentioned, Q2, 50% of our volume will go to export. We are building up on that already. And we are forecasting 10% of our local volumes to go to export. So you should walk around that 60% now.
Speaker Change: Really I mean, we are seeing as I mentioned in Q2, 50% of our volume will go to export.
Speaker Change: We are building up on that already on.
Speaker Change: We are forecasting 10% of our local volumes to ultra poor Buddy.
Speaker Change: You should walk around that 60% number.
Oriana Covault: Okay, thank you very much. You're very welcome.
Speaker Change: Okay. Thank you very much youre very welcome.
Miguel Matias Galuccio: Thank you. At this time, I would now like to turn the conference back over to Miguel Galuccio for closing remarks.
Speaker Change: Thank you at this time I would now like to turn the conference back over to Miguel <unk> with Shaw for closing remarks.
Miguel Matias Galuccio: Well, guys, thank you very much for participating. Thank you for the support and for the continued interest in Vista. Have a good day.
Miguel Matias Galuccio: Alright, Thank you very much for participating thank you for the support for the continued interest in Vista.
Operator: This concludes today's conference call. Thank you for participating. You may now disconnect.
Speaker Change: All a good day.
Speaker Change: This concludes today's conference call. Thank you for participating you may now disconnect.
Speaker Change: Yes.
Speaker Change: [music].
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Speaker Change: Yes.
Speaker Change: [music].
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