Q2 2025 Vista Energy SAB de CV Earnings Call
[music].
Operator: Hello, everyone, and welcome to the Vista's second quarter 2025 earnings 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.
Hello, everyone and welcome to the beef desk second quarter 2025 earnings call.
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Operator: Please note, this event is being recorded.
Please note this event is being recorded.
Alejandro Chernakov: Now it's my pleasure to turn the call over to Business Strategic Planning and IRO, Alejandro Chernakov. Thanks. Good morning, everyone.
Alejandro China: Now, it's my pleasure to turn the call over to Mr Strategic planning and I, our own Alejandro China calls. Please proceed.
Alejandro China: Thanks.
Alejandro Chernakov: We are happy to welcome you to Vista's second quarter of 2025 results conference. I am here with Miguel Galuccio, Vista's Chairman and CEO, Pablo Vera Pinto, Vista's CFO, Juan Garobi, Vista's CTO, and Matias Huesel, Vista's COO.
Speaker Change: Everyone. We're happy to welcome you to restart the second quarter of 2025 results Conference call I'm here with me Gotta go who shopped with us chairman and CEO Pablo without being without CFO, one got Oh, he's a CTO waste that'll be that's C O world.
Alejandro Chernakov: Before we begin, I would like to draw your attention to a cautionary statement on slide Please be advised that our remarks today, including the answers to your questions, may include forward-looking. These forward-looking statements are subject to risks and uncertainties that could cause actual results to be materially different from the expectations contemplated by the Our financial figures are stated in U.S. dollars and in accordance with International Financial Reporting Standards, IFRS. However, during this conference call, we may discuss certain non-IFRS financial measures such as adjusted expenses. Reconciliations of these measures to the closest IFRS measures can be found in the earnings release that we issued yesterday.
Speaker Change: Before we begin I would like to draw your attention to our cautionary statement on slide two.
Speaker Change: Be advised that our remarks today, including the answers to your questions may include forward looking statements.
Speaker Change: These forward looking statements are subject to risks and uncertainties that could cause actual results to be materially different from the expectations contemplated by these remarks.
Speaker Change: Our financial figures are stated in U S dollars and in accordance with international financial reporting.
Speaker Change: Right.
Speaker Change: During this conference call, we may discuss certain non <unk> financial measures such as adjusted EBITDA.
Speaker Change: Reconciliations of these measures to the closest branch measures can be found in the earnings release that we issued yesterday. Please check our website for further information.
Alejandro Chernakov: Please check our website for further information. Our company is the Sociedad Anónima Bursátil de Capital Variable, organized under the laws of Mexico, registered in the Bolsa Mexicana de Valores and the New York. Our stickers are Vista in the Bolsa Mexicana de Valores and BIST in the New York.
Speaker Change: Company is a software only model.
Speaker Change: Capital.
Speaker Change: Organized under the laws of Mexico, where do you think there was some kind of a loaded.
Speaker Change: And the New York Stock Exchange articulates a restocking there was something like you kind of evaluate <unk> in the New York stock exchange.
Alejandro Chernakov: As explained in our earnings released yesterday afternoon, please be advised that the operating and financial metrics shown in this presentation reflect the effects of consolidating the acquisition of Petronas Argentina as of April 1st, 2020.
Speaker Change: As explained in our earnings release yesterday afternoon.
Speaker Change: The operating and financial metrics shown in this presentation reflect the effect of consolidating acquisition of Petrobras Argentina as of April 2025.
Alejandro Chernakov: Finally, note that, as of this webcast, we have moved all definitions, which were previously at the bottom of each slide, to an appendix at the end of the presentation.
Speaker Change: Finally note that as of this webcast. We have moved all the financials, which were previously at the bottom of its light to an appendix at the end of the presentation.
Alejandro Chernakov: I will now tell the corner over to Miguel. Thanks, Ale.
Speaker Change: I will now turn the corner on where do we go.
Speaker Change: Thanks Ali good morning, everyone and welcome to the 17 call.
Miguel Galuccio: Good morning, everyone, and welcome to this evening call. Q2 2025 was transformational for our company, as we completed the acquisition of 50% stake in La Marga Chica, the second-largest oil production block in Bacamora. This transaction has turned Vista into a significantly larger company. Boosted by this acquisition, Q2 total production was 118,000 VOEs per day. an increase of 81% year over year. Oil production was 102,000 barrels per day, 79% year over year. Vista is now the largest independent oil producer and the largest oil exporter in Argentina. Total revenues during the quarter were $611 million, 54% above the same quarter of last year.
Speaker Change: Q2, 2025 was transformational for our company.
Speaker Change: We completed the acquisition of 50% uptake in the market <unk> got the second largest oil production block in <unk>.
Speaker Change: This transaction then we start each of significantly larger company boost.
Speaker Change: Boosted by this acquisition Q2 total production was one carried 18000 boe's per day.
Speaker Change: The increase of 81% year over year.
Speaker Change: Oil production was 102000 barrels per day, 79% year over year.
Speaker Change: <unk> is now the largest independent oil producer and the largest oil exporter in Argentina.
Speaker Change: Total revenues during the quarter were $611 million.
Speaker Change: 54% above the same quarter of last year.
Miguel Galuccio: Lifting cost was $4.7 per DOE, 4% above year-over-year. Capital expenditure was $356 million, driven by the ramp-up in new oil activity during the quarter, both in Vista Operated Block and in La Marga Church. Adjusted EVDA was $405 million, an inter-annual increase of 40%. The income was $235 million, including $102 million related to one of mainly related to the Petronas Argentina acquisition. Earnings per share were $2.3. Free cash outflow in this quarter was $1.4 billion, mostly reflected that from cash payment of the Petronas Argentina acquisition. Finally, net leverage ratio at the quarter end was 1.38 times on a performance basis, reflecting the new debt rate to finance this cash phase.
Speaker Change: Lifting cost was $4 $7 per Boe.
Speaker Change: 4% above year over year.
Speaker Change: Capital expenditure was $356 million.
Speaker Change: Driven by the ramp up you will activity during the quarter both in the operated block and in America Chico.
Speaker Change: Adjusted EBITDA was $405 million and into annual increase of 40%.
Speaker Change: Net income was $235 million, including one can be $2 million related to one off mainly related to the better than us ashamed in acquisition.
Speaker Change: Earnings per share were $2 $3.
Speaker Change: Free cash flow outflow in this quarter it was $1 $4 million, mostly reflected strong cash payment of the Petronas Argentina precision.
Speaker Change: Finally, net leverage ratio at quarter end was 138 times on a pro forma basis, reflecting the new debt raised to finance these cash payment.
Miguel Galuccio: During Q2, we made solid progress on the operational front. We will activate pickups sequentially, with 24 wells connected during the quarter, 8 in Bajada del Palo Este, 4 in Bajada del Palo Este, and 12 corresponding to our 50% working interest in La Marga Churro. We continue to see the result of our strong focus on cost efficiency. We made decisive progress in reducing new oil costs, capturing savings through innovation and efficiency. changes to our contract strategy and contract renegotiations for specific consumables and services. This has led to a new drilling and completion cost of $12.8 million per well, representing a saving of $1.4 million per well, or 10%, which will be reflected in our cost of a new well starting in Q3 2024.
During Q2, we made solid progress on the operational front.
You will activity pick up sequentially with 24 wells connected during the quarter.
Speaker Change: In Bajada del Palo Este for in Bajada, Palo Este, and 12 corresponding to our 50% working interest in the amount of <unk> chica.
Speaker Change: We continue to see that is sold with a strong focus on cost efficiency.
Speaker Change: We may decisive progress in reducing <unk> costs, capturing savings through innovation and efficiency change.
Speaker Change: Changes to our contracting strategy and contract renegotiations for a specific home.
Speaker Change: Few models and services.
Speaker Change: This has led to a new drilling and completion cost of $12 $8 million pretty well.
Speaker Change: Representing a savings of $1 4 million per well.
Speaker Change: 10%, which will be reflected in our cost of a new with it starting in Q3 2025.
Miguel Galuccio: Following the inauguration of Old Elbal Duplicar Pipeline in March, we eliminated all tracking as of April 1st. This led to a $41 million saving compared to Q4 2024. substantially improving our market. Total production was 118,000 VOEs per day, a sequential increase of 46% and inter-annual increase of 81%. These reflect the solid execution of our new well campaign, as we connected 47 new wells in the last 12 months, and the consolidation of La Marga Chica production as of April 1st. Oil production was 102.2 thousand barrels oil per day, 79% above year-over-year and 47% above Q1. Gas production increased 93% on an inter-annual basis and 44% on a sequential basis.
Speaker Change: Following the inauguration of wholesale while duplicated by line in March we eliminated all tracking as of April 1st.
Speaker Change: This led to a $41 million of saving compared to Q4 24.
Speaker Change: Substantially improving our margins.
Speaker Change: Total production was 118000 Boe's per day, a sequential increase of 46% inter annual increase of 81%.
Speaker Change: These reflect the solid execution of our new wood campaign.
Speaker Change: Connected 47, new wells in the last 12 months.
Speaker Change: The consolidation of La <unk> Chica production as of April 1st.
Speaker Change: Oil production was one country to 2000 barrels of oil per day.
Speaker Change: 79% above year over year, and 47% above Q1.
Speaker Change: Gas production increased 93% on an annual basis and 44% on a sequential basis.
Miguel Galuccio: In Q2 2025, total revenues were $611 million, 50% higher year-over-year, driven by the strong increase in oil production, which more than offset lower oil prices. Oil exports tripled year-over-year to 5.6 million barrels for the quarter, boosted by the production growth and the acquisition of La Marga Chile. realized oil price was $62.2 per barrel on average, down 13% on interannual basis, mainly driven by the lower international price. During Q2, 100% of oil volumes sold were at export parity prices. Lifting cost during Q2 was $4.7 per DOE, sequentially flat, reflecting our continued focus on cost control. Selling expenses per VOE came down 41% quarter over quarter, reflecting the elimination of oil tracking as of April 1.
Speaker Change: In Q2, 2025 total revenues were $611 million.
Speaker Change: 50% higher year over year, driven by the strong increase in oil production, which more than offset lower oil prices.
Speaker Change: Oil export triple year over year to $5.
Speaker Change: Medium barrels for the quarter.
Speaker Change: Boosted by the production growth and acquisition of La <unk> Chica.
Speaker Change: Realized oil price was $62 $2 per Nevada, <unk> down 13% on an annual basis, mainly driven by the lower international prices.
During Q2, 100% of oil volumes sold were at export parity prices.
Speaker Change: Lifting costs during Q2 was $4 $7 per.
Speaker Change: Sequentially flat, reflecting our continued focus on cost control.
Speaker Change: Selling expenses for the year.
Speaker Change: It came down 41% quarter over quarter.
Speaker Change: Selecting the elimination of all tracking as of April 1st.
Miguel Galuccio: This led to a saving of 28 million dollars vis-a-vis Q1. and $41 million vis-a-vis Q4 2024, the quarter during which tracking volumes peak. Adjusted EVDA during the quarter was $405 million, 40% higher on an inter-annual basis, driven by the production increase in our operating blocks and the consolidation of 50% working interest in La Marga. On a sequential basis, adjusted EVDA margin increased 4% match point, and net back remained flat as the elimination of oil tracking offset lowered oil prices. During Q2 2025, cash flow from operating activities was minus $9 million. reflecting in-contact payment of $250 million.
Speaker Change: This led to a savings of $20 million of vis vis Q1.
Speaker Change: $41 million <unk> Q4, 2020 for the quarter during which drags in volumes peaked.
Speaker Change: Adjusted EBITDA during the quarter was $405 million, 40% <unk> hundred 90, <unk> annual basis.
Speaker Change: Given by the production increase in our operating blocks and the consolidation of 50% working interest in America Chica.
Speaker Change: On a sequential basis adjusted EBITDA margin increased 4% much point on netback remained flat as the elimination of oil tracking offset lower oil prices.
Speaker Change: During Q2 2025 cash flow from operating activities was minus $9 million.
Speaker Change: Reflecting income tax payment of $250 million.
Miguel Galuccio: $59 million increase in working capital and payments for maintenance pensions of $18 million. Cash flow used in investing activities was $1,347 million, reflecting a crude capex of $356 million. an increase of $140 million in working capital and the acquisition of Petronas Argentina for $842 million net. The free cash outflow during the quarter was $1.4 billion, mostly reflecting the upfront payment of Petronas Argentina. Cash flow from financing activities was $770 million. reflecting the proceeds from borrowings of $1,379 million and partially offset by the repayment of borrowings of $514 million.
Speaker Change: A $59 million increase in working capital payments for maintenance bancshares of $18 million.
Speaker Change: Cash flow used in investing activities was 1340 $7 million.
Speaker Change: Reflecting our accrued capex of $356 million.
Speaker Change: An increase of $140 million in working capital and acquisition of better enhance Argentina for $842 million net.
Speaker Change: The free cash outflow during the quarter was $1 4 billion.
Speaker Change: Mostly reflecting the upfront payment of Petronas Argentina.
Speaker Change: Cash flow from financing activities was $770 million.
Speaker Change: Collecting the proceeds from borrowings of 1370 $9 million.
Speaker Change: Partially offset by the repayment of borrowings of $514 million.
Miguel Galuccio: After quarter-end, we have signed three-term loans with local and international banks for a total of $500 million to cancel all understanding maturities in the second half of 2025 and early 2026. Finally, cash at period end was $154 million. Net leverage ratio on a performance based in reflecting the Petronas transaction stood at 1.38 times adjusted FDA.
Speaker Change: After quarter end, we have signed three term loans, we look as an international bank for a total of $500 million to cancel all understanding maturities in the second half of 2025 in early 2026.
Speaker Change: Finally cash at period end was $154 million.
Speaker Change: Net leverage ratio on a pro forma basis, reflecting depends on that transaction is stood at 138 times adjusted EBITDA.
Miguel Galuccio: Our updated annual guidance reflects that, following the acquisition of La Marga Chica, we have emerged as a company with a larger scale and a stronger cash flow generation. Total production in 2025 is forecast between 112,000 and 114,000 BOE per day. Based on the planned well times, we forecast between 125,000 and 128,000 VOEs per day for the second semester. which leaves us with well-positioned for a greater start in 2026. Assati DBA is forecast between $1.5 and $1.6 billion for the year, assuming $65 rent for the second semester, equivalent to $60 per barrel of real-life price. A change in $5 per barrel of realized oil price in the second half of the year results in a change in adjusted EVDA of $80 million.
Speaker Change: Our updated annual guidance reflect debt following the acquisition of La <unk> Chica, we have emerged as a company with larger scale and stronger cash flow generation.
Speaker Change: Total production in 2025 is forecast between one country and 12 and 114000 Boe's per day.
Speaker Change: Based on the planned well tie ins, we forecast between one country identify on 128000 Boe's per day for the second semester.
Speaker Change: Which leaves us well positioned for a great start in 2026.
Speaker Change: Adjusted EBITDA is forecast between one five and $1 6 billion for the year, assuming $65 Brent for the second submit debt equivalent to $60 per Nevada of realized price.
Speaker Change: A change in $5 per lateral of realized oil price in the second half of the year result in a change in adjusted EBITDA of $80 million.
Miguel Galuccio: During the second semester, we forecast $825 to $925 million of adjusted EVDA, or $1.65 to $1.85 billion on analyzed run rate basis. To deliver this plan, we forecast to connect 59 new wells during the year, of which 34 were connected in the first semester, combining our operating block with our working interest in La Marga Chur. CAPEC in this plan is forecast at $1.2 billion for the year. These reflect our new drilling and completion costs and $60 million of savings in facilities compared to the original 2025 guidance. Our new 2025 plan represents an improvement to the original plan.
Speaker Change: During the second semester, we forecast a $125 million to $925 million of accepted EBITDA or $1 65 to one.
Speaker Change: <unk> $85 billion on.
Speaker Change: On an annualized run rate basis.
Speaker Change: To deliver this plan, we forecast to connect 59, new wells during the year.
Speaker Change: Which 34 were connected in the first semester, combining our operating block with our work in this and the amount of got Chico.
Speaker Change: Capex in this plan is forecast by $1 $2 billion for the year.
Speaker Change: This reflects our new drilling and completion cost and $60 million of saving in facilities compared to the original 2025 guidance.
Speaker Change: Our new 2025 planned represent.
Speaker Change: Premium to the original plan.
Miguel Galuccio: $60 realizer price, we are forecasting a neutral free cash flow during the second half of the year composed of negative free cash flow in Q3 and positive free cash flow in Q4. evidencing a strong capital discipline in the context of high oil price volatility. Compared to the original guidance for the year, we are now forecasting to deliver 16% more production and 70% more adjusted EVDA at $65 rent while maintaining the same capex level. The projected growth for 2025 compared to 2024 is 62% for production and 41% for adjusted EVDA.
Speaker Change: $60 realized price we are forecasting a note that our free cash flow during the second half of the year.
Speaker Change: Those of negative free cash flow in Q3.
Speaker Change: The free cash flow in Q4.
Speaker Change: Evidence in a strong capital discipline in the context of high oil price volatility.
Speaker Change: Compared to the original guidance for the year, we are now forecasting to deliver 16% more production and 70% more adjusted EBITDA of $65, Brent while maintaining the same capex levels.
Speaker Change: <unk> did grow for 2025 compared to 2020 is 62% oil production and 41% for adjusted EBITDA.
Miguel Galuccio: To conclude this call, and before we move to Q&A, I would like to make some closing remarks. This has been a transformational quarter for Vista. The acquisition of 50% working interest in La Marga Chicam materially boosted production and adjusted EVDA. Our company has emerged as the largest independent oil producer and the largest oil exporting in Argentina. On the operational front, we significantly reduced selling expenses by eliminating oil tracking, which expanded AXA's CDBDA margin, even though oil prices dropped during the quarter. We have made change to our DNC contracting model, capturing savings through innovation, and renegotiating rates with service providers, leading to a 10% lower welcome.
Speaker Change: To conclude this call and before we move to Q&A I will like to make some closing remarks.
Speaker Change: This has been a transformational quarter for Vista that position, a 50% working interest in the amount of got cheek materially boosted production and adjusted EBITDA.
Speaker Change: Our company has the mesh and the largest independent oil producer.
Speaker Change: In the largest oil exporting in Argentina.
Speaker Change: On the operational front, we significantly reduced selling expenses by eliminating trucking, which expanded adjusted EBITDA margin, even though oil prices dropped during the quarter.
Speaker Change: We have made change to our D&C contracted more than capturing savings through innovation and renegotiating rates with service providers, leading to a 10% lower well cost.
Miguel Galuccio: capturing significant value through a highly competitive development cost. Finally, the revised annual guidance following the acquisition of La Amarga Chica implies material production and adjusted FDA growth, while significantly improving our free cash flow Before we move to Q&A, I would like to thank everyone at Vista for their outstanding work this quarter.
Speaker Change: Capturing significant value through a highly competitive development costs.
Speaker Change: Finally, the revised annual guidance following the acquisition of La <unk> Chica implies material production and adjusted EBITDA growth, while significantly improving our free cash flow profile.
Speaker Change: Before we move to Q&A I would like to thank everyone at <unk> for their understanding work this quarter.
Operator: operator.
Operator: We can now move to Q&A. Thank you so much. And as a reminder, to ask a question, press star 11 on your telephone and wait for your name to be announced. To remove yourself, press star 11 again. Thank you.
Speaker Change: Operator, we can now move to Q&A.
Speaker Change: Thank you so much and as a reminder to ask a question press star one on your telephone and wait for your name to be announced to remove yourself Crestar. One line again, Thank you and please standby for our first question.
Operator: And please stand by for our first.
Bruno Montanari: And it comes from the line of Bruno Montanari with Morgan Stanley. Please proceed. Good morning, everyone. Thanks, Miguel, for the call and for the detail on the guidance. I have one question about La Marga Chica. Based on the available data, it seems that the well costs are a bit higher than those at BPO, while the EURs are a bit lower. So could you shed some light on why those differences exist? And if you could somehow contribute to improve the performance of those wells, even if you do not operate the area. And also, perhaps, on the rationale of investing more on that side of the fence compared to adding more wells at BPO.
Speaker Change: And it comes from the line of Bruno Montanari with Morgan Stanley. Please proceed.
Bruno Montanari: Good morning, everyone.
Speaker Change: Thanks for that.
Speaker Change: And for the detail on the guidance I have one question.
Speaker Change: Sorry about.
Speaker Change: Zika.
Speaker Change: Based on the available data it seems that the well costs are a bit higher than those of BPI.
Speaker Change: <unk> are a bit lower so could you shed some light on why those differences exist.
Speaker Change: If you could somehow.
Speaker Change: Improving the performance of those wells, even if you do not operate area.
Speaker Change: And also perhaps on the rationale of investing more on the side of the defense contract revenue more wells at <unk>. Thank you very much.
Miguel Galuccio: Thank you very much.
Speaker Change: Well, thank you very much.
Miguel Galuccio: Hi Bruno, thank you very much for your question. Well, let me touch base first, probably on the rock.
Bruno Montanari: Hi, Bruno Thank you for your question.
Speaker Change: Well, let me touch rates first probably on the rock.
Miguel Galuccio: La Marga Chica is in the best neighborhood of Acamorta. It's right next to our block, as you know, Bajada del Padro Este and Bosa Guada Federal. We have studied this area for a long time, before we came to Vista and now in Vista. And definitely, we understand that there is geological continuity there. So we have the same rock quality. If you look at the average oil productivity, the performance of La Marga Chica is very robust. It's comparable 100% to the block that we operate. From the production standpoint now, when we look at what we have and what was delivered for Q1 and Q2, La Marga Chica came in Q1, as we said, with a lower quarter, but in Q2, it has been back to the level that it had in Q4.
Speaker Change: La <unk> Chica is from diverse neighborhood of our Comerica is right next to our low cost <unk> by the way on both our federal.
Speaker Change: We have in this study in this area for a long time before we can to meet our now in beta and definitely we understand that this geological continuity there.
Speaker Change: So we have the same low quality.
Speaker Change: You look at the evidence of DVT.
Speaker Change: <unk> the former.
Speaker Change: I might have got sika is very robust.
Speaker Change: <unk>, 100% sure look that we operate.
Speaker Change: From the production standpoint, when we look at the World what we have on what Horton delivery for Q1 and Q2.
Speaker Change: <unk> Chica came in Q1, we said with a lower quarter in Q2.
Speaker Change: <unk> has been back to the level that you had in Q4.
Miguel Galuccio: And for us, that reflects the quality of what we forecast, the quality of the rock that we saw, and that is confirming, basically, what we acquired in PEPASA. If we focus particularly in Q2, we saw a very solid ramp-up driven by 24 wells connected at 100% working interest, so a net of 12 wells for Vista, and the production of large ramp-up was 23% from 35,000 barrels of oil per day in April to 43,000 barrels of oil per day issued.
Speaker Change: And for that and does reflect the quality of what we forecast the quality of the rock.
Speaker Change: That we saw in that is conforming basically would wake word quiet MPI passive.
Speaker Change: We focus particularly in Q2.
Speaker Change: We saw a very solid ramp up.
Speaker Change: Driven by 'twenty four wells connected at 100% working interest so.
Speaker Change: Net of toy well for Vista.
Speaker Change: And the production of the last ramp up it was 23% from 35000 barrels per day in April to 43000 barrels of oil per day issue.
Miguel Galuccio: We have a few, probably, come... Can you imagine we have had several discussions with YPS? We are working very well with them. We have exchanged a lot of technical information that has been valuable for us and valuable for them. And we are trying to progressively start to exchange and put some of that conclusion that we have together in action. So I would say, to be fair, for what we see, it clearly that the fact that they are operating but we are working together will create synergies and we will create various costs of better productivity but not only in LACH, I will say also in Baja del Palo Oeste.
Speaker Change: We did we.
Speaker Change: We got half.
Speaker Change: You probably come.
Speaker Change: Coming machine, we have several discussion who Ips we are working very well with them.
Speaker Change: We have a change a lot of technical information that has been valuable for us and valuable for them.
Speaker Change: And we are trying to.
Speaker Change: Seb.
Speaker Change: Got it to exchange and put some of that conclusion that we have together in actions.
Speaker Change: So I would say to be fair.
Speaker Change: For what we see.
Speaker Change: It clearly does.
Speaker Change: And the fact that we will win.
Speaker Change: They are operating but we are working on together.
Speaker Change: Synergies and various cost of better productivity, but not only in large we said also <unk> by the way.
Miguel Galuccio: We are comparing not oil costs, we are comparing what we are doing in terms of performance. We are comparing what we are paying for services. We are comparing technology. We are comparing how we work with some from one side of the other of defense. We are looking at what we do on the borders and how we can optimize wealth from one side and from the other side. This for sure is going to bring value for both sides before, for example, just to give an example, before they were thinking a lot to drill 3,000 or 3,200 meter wells.
Speaker Change: We had a comparator.
Speaker Change: Not the oil costs were comparable.
Speaker Change: We are doing into nonperforming were compared to where we are where we are paying for services.
Speaker Change: We are comparing when compare technology.
Speaker Change: We are compare how we were with some from one side of the outlet of defense.
Speaker Change: We are looking at what we do on the board of data on how we can optimize was from one side and from the other guy is for sure.
Speaker Change: It's going to bring value.
Speaker Change: For both sides before for example, just to give you. An example, before with they were thinking and large 200.
Speaker Change: <unk> 3200 meter width.
Miguel Galuccio: That is not needed as far as we have an agreement on what will happen in the border of the two blocks. So, there are plenty of synergies that basically will improve the performance of the two blocks.
That's it.
Speaker Change: That is not needed thus far and we have an agreement on what will happen in the border of the two block.
Speaker Change: So there's plenty of senior debt.
Speaker Change: It basically will improve the performance.
Speaker Change: Four of the of the two blocks.
Bruno Montanari: Perfect, thank you very much. Thank you.
Speaker Change: Perfect. Thank you very much.
Speaker Change: Thank you one moment for our next question. Please.
Operator: One moment for our next question. And it comes from the line of Alejandro Demichelis with Jeffrey. Please proceed. Good morning, Vista team. Thank you very much for taking my questions. The question is, Miguel, maybe you can double-click on how you see these kind of well-caused developments and potential further reductions going forward. And also, if you can kind of compare those well-caused, say, in Amarga Chica versus what you have in VPO or VPE. Well, thank you, Ale, for the question. Yes, for sure, I can double click technically on what we are doing because we are putting a lot of focus on oil costs today.
Speaker Change: And it comes from the line of Alejandro Demichelis with Jefferies. Please proceed.
Alejandro DeMichelis: Good morning Vista team. Thank you very much for taking my questions.
Speaker Change: The question is maybe you can double click on how you see these kind of well cost developments on potential further reductions going forward and also if you can kind of compare those well costs say in a matter of rocky gap versus what you have in <unk>.
Speaker Change: Well. Thank you all for the question, yes for sure I can double click technically in what we're doing because we are putting a lot of focus on webcast today.
Alejandro DeMichelis: I would think there are three main verticals that drive our initiative of world cost reduction. The first vertical is technology and innovation. And I will give you some example of that that I think will give you a picture of what we're doing today. The third example could be the use of wet sand in our operation. We piloted that technology last year, and now we have. We have taken the decision to roll out the use of WETSAN for the full operation. That will bring a lot of savings, immediate savings and future savings. We recently introduced a technology that is called a smart light.
Speaker Change: We think there are three main verticals that drive.
Speaker Change: Our initial depot, who had cost reduction.
Speaker Change: The first vertical is technology and innovation.
Speaker Change: I will give you. Some example of that.
Speaker Change: But I think.
Speaker Change: I'll give you a picture of what we're doing today.
Speaker Change: The first example could be the use of with Sun.
Speaker Change: In our operation, we buy that technology last year.
Speaker Change: Now we can.
Speaker Change: We have taken the decision to rollout the use of with Sun for the full operation.
Speaker Change: That will bring the LOE savings immediate savings on future savings.
Speaker Change: We recently introduced a technology that is call it a month of July.
Speaker Change: <unk>.
Miguel Galuccio: We improve the drilling efficiency when we are doing the curved section. Basically, using a motor and then leaving the rotary steerable to just to drill and navigate the horizontal section. This approach can reduce manual integration and result in time saving of around 16 hours per well. Another example is what we are implementing with our FRAG plan and real-time monitoring system. We modify our pumping schedule on the fly from the remote operation center in order to optimize the frac's size. that basically is a direct function of the cost. And also to avoid the runway fracts, the fracts that basically are not increasing the area of contact of the reservoir, but they are running away through a micro fracture, or because they find a fall, or because they find a line of micro fracture to a different well.
Speaker Change: With improved digital and efficient when we are doing the curse section.
Speaker Change: Basically using a more total and then leaving the receivables to shaft two drilled and navigate.
Speaker Change: So thats the horizontal section.
Speaker Change: This approach reduces manual integration and result in saving of around 16 hour Spiderwood.
Speaker Change: Another example is what we are implementing with our track plan and real time monitoring system.
Speaker Change: We modified our bumping skewed on the flight from the remote operations center in northern to optimize the Frac size.
Speaker Change: That.
Speaker Change: Basically is it function.
Speaker Change: Direct function of the cost.
Speaker Change: And also to avoid that.
Speaker Change: <unk> Fracs.
Speaker Change: Fracs that basically are not increasing the area contact of the reservoir, but they are running away through microfracture or because they find it fall or we call them.
Speaker Change: In line with Microfracture and up to a different world.
Miguel Galuccio: The second driver is cost reduction through negotiation of specific consumables of service, like gasoline, gas oil, water transfer services, drilling fluids, and others. The third driver is related to the change of our contract strategy. We've been reviewing for the last six years our contract strategy and our contract strategy has been very useful for us. starting up and running Vista all the way to here. Now, we are right to a moment where integration basically was not bringing the amount of value that basically will take our cost performance reduction forward. Also, when we were doing comparison in the volatile.
Speaker Change: The second driver is cost reduction through negotiation of a specific consumables of service.
Speaker Change: Like gasoline.
Speaker Change: Soil water transfer services drilling fluids and others.
Speaker Change: Third driver is related to the change of our contact strategy.
Speaker Change: We've been reviewing for the last CCR, our contradict strategy.
Speaker Change: And our contract <unk> has been very useful for us.
Speaker Change: Starting up and running all the way to here.
Speaker Change: Now we are writing to a moment where integration.
Speaker Change: Basically was not bringing the amount of value.
Speaker Change: Debt.
Speaker Change: Basically we take out of costs.
Speaker Change: Four months.
Speaker Change: Production for.
Speaker Change: So when we were doing comparison in the volatile.
Miguel Galuccio: Oil prices scenario with US, we didn't saw that the prices of the service were dropping the way they were dropping in US. So we basically decide to unbundle the services of the drilling rig into individual contracts. We did a few other things that it will take too long for me to explain. And we basically obtained savings to our overall cost. The savings already captured on our drilling and completion costs are well. have taken the world cost from 40.2 million dollars to 12.8 million dollars, so it's a 10% reduction. And you should assume that going forward, we will see more short-term reductions.
Speaker Change: Oil prices, a scenario, where the U S. We need and so the prices of the service we're dropping the way they are where they're operating in the U S.
Speaker Change: So.
Speaker Change: We basically decide to unbundled services.
Speaker Change: The division rig each individual contracts, we did few others since that.
Speaker Change: They too long for me to explain.
Speaker Change: And we basically obtain savings to our lower overall costs.
Speaker Change: The savings already captured.
Speaker Change: Our drilling and completion cost per well.
Speaker Change: Take the World goes from $40 2 million to $12 8 million. So we said 10% reduction.
Speaker Change: And you should assume that going forward, we will see more of a short term reductions.
Miguel Galuccio: and also which you should expect that we'll see also mid-term and long-term reduction. Some of them are not related to contra-renegotiation, but are more related to... the innovation and technology changes that are coming from the changes that we are doing in the process. And back to Bruno's question, what we saw in La Marga Chica, in terms of where we were, both companies, when we started to operate. So taking all this out of consideration, we have, with YPF, similar costs on that block, on what happened in La Marga Chica and what happened in Bajada de Palo Verde.
Speaker Change: And also wish you should expect that we'll see also meet tenants on long term reductions some.
Speaker Change: Some of them are not related to contract renegotiation.
Speaker Change: But are more related to.
Speaker Change: <unk>.
Speaker Change: The the innovation and technology changes that are coming from the changes that we're doing in the process.
Bruno Montanari: But back to Bruno.
Speaker Change: Question.
Speaker Change: What we saw in La <unk> Chica in Denver, where we were.
Speaker Change: Most compound with when we started to operate so taking all of this out of consideration.
Speaker Change: We have with Ips similar cost on that block on what happened in the market you can work up and by the way.
Miguel Galuccio: Hope I answered your question, Ale.
Speaker Change: Hope I answered your question.
Operator: You know, that's perfect. Thank you very much. Thank you.
Speaker Change: Yeah perfect. Thank you very much.
Speaker Change: Thank you one moment for our next question. Please.
Daniel Guardiola: One moment for our next question. Okay and it comes from Daniel Guardiola with PTG Pactual. Please proceed. Thank you very much for the presentation. Good morning, Miguel and Alejandro. My question is on free cash flow. In the second queue, we saw a large negative FCF, in part driven by the acquisition of Petronas, but also due to a deterioration of working capital.
Speaker Change: Okay any comes from Danielle <unk> with BTG Pactual. Please proceed.
Danielle: Thank you very much for the presentation. Good morning, again, I'm going to hand it all.
Speaker Change: My question is on free cash flow.
Speaker Change: The second deal we saw we saw a large negative FCS in part driven by the acquisition of Petrobras, but also due to a deterioration in working capital and I wanted to ask any Gail if you could elaborate on the deterioration of your working capital and what we should expect going forward.
Miguel Galuccio: And I wanted to ask, Miguel, if you could elaborate on the deterioration of your working capital and what we should expect going forward. And also, considering the uncertain environment of oil prices, what is the company's mindset in terms of free cash regeneration for 2026 and onwards? Would you feel comfortable operating on negative levels or you're expecting to reach a more neutral level in 2026? Thank you.
Speaker Change: Also considering the uncertain environment upon prices what is the company's mindsets.
Speaker Change: Free cash flow generation for 2000 tendency 10 onwards will you feel comfortable operating in negative levels or you're expecting to reach a more neutral level.
Speaker Change: 2006, thank you.
Miguel Galuccio: Thank you, Daniel, for your question. So. If you consider the VIA generation and the CAPEC for the quarter, just to put your question in context. EBITDA is higher by around 60 million US dollars. But this particular quarter, we have a low one-off, as you know, which led to the negative free cash flow that you are pointing out. The most obvious is PEPAS acquisition, which requires $142 million of net outflow. We also have income tax payment of 250 million dollars. An increase of $45 million in VAT credits. which both, I would say, should be revert in the coming quarter.
Speaker Change: Thank you Daniele for your question.
Speaker Change: So.
Speaker Change: Sure.
Speaker Change: If you consider the aviation edition on the Capex for the quarter.
Speaker Change: Just to answer your question in context.
Speaker Change: EBITDA is higher by around 60 million U S dollar.
Speaker Change: But this particular quarter, we have a low of one off.
Speaker Change: We led to the Navy and the negative free cash flow that you are pointing out.
Speaker Change: The most obvious is the boss acquisition.
Speaker Change: If you require only $42 million of net outflows.
Speaker Change: We also have income tax payment of $250 million.
Speaker Change: An increase of $45 million EMEA and <unk>.
Speaker Change: Which most I, we said to reiterate that in the coming quarter, because when you compare what we are doing quite a good quarter.
Miguel Galuccio: Because when you compare what we're doing quarter with quarter, it's for you clear to expect that part of that is going to be revert. We also have an increase in CPEC working capital of $140 million U.S. that was related to a normalization of CAPEG working capital and 50 million dollars of new cash costs from LACHE. that was considered as part of the acquisition. Part of this change was also driven by the additional liquidity we have after issuing the international loan, where, at the same time that we were negotiating new tariffs, with our service provider, we decide to use part of the gas to cancel some of the, basically, services and DSO that we have in hand in order to also put the different condiments to the negotiation that we were having.
Speaker Change: As for your clear to affect that part of that is contributory basis.
Speaker Change: We also have an increase in capex and working capital of $140 million U S.
Speaker Change: That was related to a normalization of cup of Capex working capital.
Speaker Change: And $50 million order of new cash core from a large.
Speaker Change: That was part of it was considered as part of that acquisition.
Speaker Change: Part of this change was also driven by the additional liquidity, we have a steady issuing the international one way.
Speaker Change: At the same time that we were negotiating new studies.
Speaker Change: With our service provider.
Speaker Change: We decide to use the gas <unk>.
Speaker Change: To cancel some of the.
Speaker Change: Basically <unk>.
Speaker Change: And DSO that we have in hand in order to also put the.
Speaker Change: Different fundamental negotiation.
Speaker Change: That we were having.
Speaker Change: So.
Miguel Galuccio: Basically, based on the update plan that we present today, we are forecasting a neutral cash flow on the second semester. This is assuming $65 Brent. unrealized oil prices of 60. This will be composed of a negative cash flow in Q3 and a positive cash flow in Q4. We are not giving guidance of 2026 onward, but in terms of free cash flow, you basically have to assume two things. One, that in 2026, we continue growing. And second, that 2026 and 2026 onward in our model is a positive free cash flow outcome. Hope I have answered your question, Daniel.
Speaker Change: Basically based on the updated plan that we've received to date, we are forecasting a notable feature.
Speaker Change: Cash flow on the second semester this is assuming $65.
Brent.
Speaker Change: And realized oil prices of 60.
Speaker Change: This will be composed of a negative free cash flow in Q3, and a positive cash flow in Q4.
Speaker Change: We are not giving guidance of 2026 onward by the in terms of free cash flow you knew basically has just here in Q.
Speaker Change: One that <unk> will continue growing.
Speaker Change: And second that 2026, and 2020 onward in our model is you said positive free cash flow outcome.
Speaker Change: <unk> answer to your question on any of it.
Operator: Yeah.
Bruno R. Morim: Thank you, Miguel, for the detailed answer. One moment for our next question.
Speaker Change: Yes. Thank you again for the detailed answer.
Speaker Change: Okay.
Speaker Change: One moment for our next question please.
Miguel Galuccio: And it's from Bruno R. Morim with Goldman Sachs. Thank you for taking my question.
Speaker Change: And he's from Bruno Amorim with Goldman Sachs. Please proceed.
Bruno Amorim: Thank you for taking my question. Good morning, everybody. So my question is related to the potential growth between now and the end of next year or so.
Miguel Galuccio: Good morning, everybody. So my question is related to the potential growth between now and the end of next year. So, you know, considering the maximum capacity that you have in the pipeline systems, you know, what's the maximum production that Vista could deliver by the end of next year? Thank you very much. Thank you, Bruno. Thank you for the question. It's a good question.
Bruno Amorim: Considering the maximum capacity that you have in the pipeline systems.
Bruno Amorim: What's the maximum production that Vista could deliver by the end of next year. Thank you very much.
Bruno Amorim: Thank you Bruno Thank you for the questions. They would question so.
Miguel Galuccio: So we haven't, as I said, as I said to Guardiola, we haven't yet communicated 2026 numbers. We are planning to hold, and I will take the advantage of your question, an investor day in Q4 2025 to provide long-term guidance and long-term forecast. But based on our transportation capacity, we could produce up to 144,000 barrels per day. That's today. And if we include our share of Vaca Muerta Sur capacity, we can go up to 200,000 barrels per day. Of course, this is mid-2017 when PEMOS is... it will be delivered. So that is the full capacity that we have in our camp to grow production.
Bruno Amorim: We haven't and as I said.
Bruno Amorim: As I said too.
Bruno Amorim: We haven't we haven't yet communicated 2026 numbers.
Bruno Amorim: We are planning in Q4, and I will take the advantage of your question on Investor Day in Q4, 2025 to provide long term guidance on loan forecast.
Bruno Amorim: But based on our transportation capacity, we could produce up to 1000 144000 barrel per day.
Bruno Amorim: That's today any fee. We include our share of automotive vessel capacity. We can go up to 200000 barrels per day of course. This is mid 2007 when bmo's is.
Bruno Amorim: It will be the lever so that is the full capacity that we have in our com.
Bruno Amorim: To grow production.
Operator: Thank you very much.
Bruno Amorim: Thank you very much.
Leonardo Marcondes: Thank you, and hold on for our next question. is from Leonardo Marcondes with Bank of America. Please proceed.
Bruno Amorim: Thank you for our next question please.
Speaker Change: Is from no not at all Mike on this with Bank of America. Please proceed please.
Speaker Change: He removed himself next question. Please one moment.
Operator: Next question please, one moment.
Vicente Falanga: Vicente Falanga from Bradesco BBI. Your line is open. Thank you, Miguel, Ale, and Vista's team. We appreciate the guidance and the company's willingness to slow down operations to preserve the balance sheet. When we look towards the second half of the year, it seems like the global oil markets should be even more oversupplied. The question is, if oil prices move towards the $50 per barrel and stays there for a while, would Vista be willing to slow down growth even further and continue to prioritize the balance sheet? Thank you very much. Thank you, Vicente, for your question.
Speaker Change: The center for longer from Bradesco BVI.
Speaker Change: Your line is open.
Miguel Olea: Thank you Miguel Olea.
Speaker Change: <unk> team.
Speaker Change: Appreciate the guidance on the company's willingness to slow down operations to preserve the balance sheet.
Speaker Change: When we look towards the second half of the year. It seems like the global oil markets should be even more oversupplied the.
Speaker Change: The question is if oil prices move towards the $50 per barrel and stays there for a while.
Speaker Change: Would <unk> be willing to slow down growth, even further and continue to prioritize our balance sheet. Thank you very much.
Speaker Change: Thank you recently for your question.
Miguel Galuccio: Good question. So we have two drivers to protect us from lower prices. I would say the first one is our low cash cost base. um let me let me expand a bit on that one if you add up the lifting cost the inexpensive and the G&A This equates roughly to $11 per barrel. and increase all the way up to $20 per barrel if you add to that $11, the royalties and the gross rate tax. This one will be assuming a real life price of $60 per barrel. So $20 per barrel is our cash cost base.
Speaker Change: Good question.
Speaker Change: So we have two drivers to the gas from lower prices I would say the first one is our low cash cost base.
Speaker Change: Let me, let me expand a bit on the other one.
Speaker Change: If you add up the lifting cost theyre seen expensive fund the G&A.
Speaker Change: This equates roughly to $11 per barrel.
Speaker Change: An increase.
Speaker Change: We're up to $20 per barrel, if you add to that 11, the royalties on the <unk> tax.
Speaker Change: This one will be assuming a realized price of $60 per barrel.
Speaker Change: So $20 a barrel.
Speaker Change: Our cash cost base.
Miguel Galuccio: And that's going to take us a lot on the... low oil price environment. The second is the flexibility. in our drilling and completion contracts that not only come from the contract, come from the fact that we have a very short Capital Farming Cycle. And the fact also that we have 30 years' concession with no pending capital commitment also adds to that flexibility. So this enables us to reduce carbon burn rate at a very low cost. And we have proved that. I mean, we proved that during the COVID-19 pandemic. It was probably the best example of us testing all the way to the limit our agility and capacity to stop.
Speaker Change: And that will take us a lot on the.
Speaker Change: Low oil price environment.
Speaker Change: The second is the flexibility.
Speaker Change: In our drilling and completion contracts that not only come from the contract comfort in the fact that we are.
Speaker Change:
Speaker Change: Half.
Speaker Change: A very short order.
Speaker Change: Capital side of the cycle.
Speaker Change: And the fact also that will.
Speaker Change: I'll add that we have 30 year concession with no pending capital commitment also.
Speaker Change: Add to that flexibility.
Speaker Change: So this enabled us to reduce capex run rate and a very low cost.
Speaker Change: And we.
Speaker Change: We have pruned.
Speaker Change: We proved that during the COVID-19 pandemic. It was probably the best example of us.
Speaker Change: Testing.
Speaker Change: All the way to the limited our ability and capacity to a stop.
Miguel Galuccio: and to restart. So if Ibram were to fall, consistently, we have the full flexibility to protect our balance sheet by reducing activity.
Speaker Change: And to restart.
Speaker Change: So if <unk> were Q4.
Speaker Change: Consistently we have the full flexibility to protect our balance sheet by rate by reducing activity.
Miguel Galuccio: Now, shall you take a... One potential scenario, let's say that the brand falls consistently below 55. We could probably cut new oil capital from the plant and grow less and protect our balance sheet almost immediately. And remember also that we can do that gradually. So we don't need to wait until the oil price is 55. And also I want to highlight that the reverse situation also applies to this. We can easily increase activity in case that we. see our selling Q4 in a very good price or in a better oil price scenario. We know we are going to leave volatility and we have decided to be prepared for both scenarios, the low case scenario and also a more positive scenario that we are facing today.
Speaker Change: No.
Speaker Change: <unk>.
Speaker Change: One potential scenario, let's say that the brand phone consistently below 55.
Speaker Change: We probably got new World Cup it from the plan and grows less and protect our balance sheet almost immediately.
Speaker Change: And remember also that we can do that to get out of <unk>. So we don't need to wait until the.
Speaker Change: The oil price of 55.
Speaker Change: And also.
Speaker Change: Also I want to highlight that.
Speaker Change: And the reverse situation also apply to lease.
Speaker Change: We can easily increase activity.
Speaker Change: In case that we.
Speaker Change: See our sell in Q4 in a in a very good price or Nevada oil prices scenario.
Speaker Change: We know we are going to leave volatility.
Speaker Change: We have decided to be prepared.
Speaker Change: For both scenarios.
Speaker Change: The low cases scenario and also.
Speaker Change: A more positive as neither that we are facing today.
Speaker Change: Okay.
Operator: Great. That's very helpful. Thank you very much. Thank you.
Speaker Change: Great. That's very helpful. Thank you very much.
Speaker Change: Thank you.
Leonardo Marcondes: One moment for our next question. And it comes from Leonardo Marcondes with Bank of America. Please proceed. Good morning, everybody. So, my question is regarding the productivity here. What is the initial production rate, I mean the IP30, that you assume for La Marga Chica and Bajado de Palo Este in your guidance? And I'm not sure if I heard correctly the answer for Bruno's question. Do you see any further room to improve La Marga Chica productivity by working together with YPS there? Thank you very much.
Speaker Change: One moment for our next question.
Leonardo Mark: And it comes from Leonardo Mark on this with Bank of America. Please proceed.
Leonardo Mark: Hi, good morning, everybody.
Speaker Change: So my question is regarding the productivity here.
Leonardo Mark: What is the initial production rates I mean, the IP 30.
Leonardo Mark: You assume for La <unk>, Chica, and Bajada del Palo Este.
Bruno Montanari: The guidance and I'm not sure if I heard correctly the answer for Bruno's question.
Bruno Montanari: Do you see any further room, which improves Margaret you could predict <unk> T.
Bruno Montanari: By working together, we're swipe, yes, Sir thank you very much.
Miguel Galuccio: Jaleo, thank you for your question, and I will get a bit technical on this one. And we have basically heard that question before from other analysts on the P30 of La Marga Chica. And we said, La Marga Chica pecal, on average, well, is slightly lower than our operating block. But we don't think that it's related to the rock. Or we don't think that it's related that those are worth another. Or we don't think that that wealth has been operated in a fashion that is different to ours. We believe that each operator has different strategies. to manage big oil, and basically that comes from usually job management.
Speaker Change: Hi, Neil Thank you for your question.
Speaker Change: Is a bit technical on this one.
And we have basically had a debt.
Speaker Change: But the question before the.
Speaker Change: Other analysts on the periphery of La <unk> Chica.
Speaker Change: I always said.
Speaker Change: La Mer again kick up because on avid as well is slightly lower than our operated block.
Speaker Change: But we don't see that is related to the Iraq or we don't think that the deflated or run out of that at all.
Speaker Change: We don't seem that was.
Speaker Change: I had been operated in the in.
Speaker Change: And in a fashion that is different to ours.
Speaker Change: We believe that each operator has different strategies.
Speaker Change: To manage peak oil.
Speaker Change: And basically that's come from usually choke management.
Miguel Galuccio: and we may have a slightly different strategy than the one that IPF has. But we believe that is not a reflection of the rock. So we have a long-term view regarding the reservoir management that focus in the EOR of the well. For us, EOR, so the ultimate recovery of the well, is more relevant than the peak oil. And on this basis, our model showed that the La Marga Chica is as good as Bajada del Palo Este.
Speaker Change: We measure on a slightly different strategy.
Speaker Change: Strategy.
Speaker Change: They want that IPA.
Speaker Change: But we believe that this is not a reflection on that.
Speaker Change: So we have a long term view regarding the reservoir management that focus in the EUR of the world.
Speaker Change: For us EUR, so there will be a recovery of the well is Motorola deployed.
Speaker Change: On this basis.
Speaker Change: Our mortgage showed that the la <unk> chica is as good as <unk> by the way.
Miguel Galuccio: With regard to the second part of your question, yes, we touch base on that, on Bruno's question. And the short answer is... YPF people are top-notch operators and they are doing a good job in La Marga Chica. What has changed, as we said, is that the fact that we have that we have the opening between the two teams to review a lot of technical processes and details and technology that we use in a very open manner, in a very open fashion. That is the spirit from both sides. And I give credit also to the management of YPF on that.
Speaker Change: In regard to the <unk> question, Yes, we do.
Speaker Change: Got you.
Speaker Change: On that.
Speaker Change: On Bruno's question and the short answer is.
Speaker Change: <unk>.
Speaker Change: Widely if people.
Speaker Change: Top notch operators.
Speaker Change: They are doing and good Shelby America Chica Award has changed and we said it at the fact that we have.
Speaker Change: That we have the open then between the two teams to review a low technical.
Speaker Change: Processes and it is in technology that we use in a very open mind and have already opened fashion.
Speaker Change: That is the period from both sides.
Speaker Change: And I give credit to also to the management of IPF on that.
Miguel Galuccio: We are finding areas of opportunities for both. Where we probably you will see that from that discussion, we will apply some of those in La Marga Chica and why not also in Bajada de Palo Este. So the discussions are going very well. And there are a few things that we have differences. And we will see what are the best practice to be applied. Ego aside, at the end of the day, we both are to generate value to our shareholders. That's very clear. Thank you.
Speaker Change: We are finding areas of opportunities.
Speaker Change: Foremost.
Speaker Change: Where we probably you will see that from that discussion.
Speaker Change: We will apply some of those in la <unk> Chica and why not also in <unk> by the way.
Speaker Change: So the discussions are going very well and they are there is there are few seasons, we have differences.
Speaker Change: And we would see growth out of the best practice to be applied.
Igor: Igor site the end of the day, we both out of <unk> at a value to our shareholders.
Speaker Change: That's very clear thank you.
Speaker Change: Thank you one moment for our next question.
Operator: And he's from.
Speaker Change: And he is from.
Kevin McCurdy: Kevin McCurdy with Pickering Energy Partners, please proceed. Hey, good morning. The margin improvement is one of the highlights of the release, which appears structural and related to the Olde Ball expansion fully online. I believe the next midstream update for Vista is the VMOS pipeline. I was wondering if you could give an update on the progress of that project and if there's any key milestones that we should be looking for. Thank you for taking my. Hi, Kevin, thank you for your question. Yeah, we are seeing very good progress. The contractual study made in all the fronts by line pumping station, storage terminal.
Kevin McCurdy: Kevin Mccurdy Pickering Energy partners. Please proceed.
Speaker Change: Hey, good morning.
Kevin McCurdy: Sure.
Kevin McCurdy: The margin improvement is one of the highlights of the release, which clear structural and related to the old ball expansion fully online.
Speaker Change: I believe the next midstream update for Vista V. Most pipeline I was wondering if you could give an update on the progress of that project and if theres any key milestones that we should be looking for thank you for taking my question.
Speaker Change: Hi, Kevin and thank you for your question, Yes, we are seeing very good progress.
Speaker Change: The contractually start in May.
Speaker Change: The France by line pumping station.
Speaker Change: 17.
Miguel Galuccio: also the offshore terminal. We expect the first stage of the project with a capacity of around 550,000 barrels per day to be ready in mid-2017. Last week, in terms of financing, the team, the full team, close a syndicated five-year tank loan of $2 billion. at an indirect rate of software 5.5. This is obviously a very good news in terms of security financing of 70% of the project cost. Financing was obtained also from five different international banks, Citi, Doce, Itaú, J.P. Morgan, I think Santander was the other one. That for me reflects somehow investor confidence in Baca Muerta and in the old project of Baca Muerta as well.
Speaker Change: Also the offshore terminal.
Speaker Change: With that we expect the first stage of the project with a capacity of around.
Speaker Change: Around 550000 barrel per day to be ready in mid 2007.
Speaker Change: Last week.
Speaker Change: In demo financing.
Speaker Change: And the team the full team.
Speaker Change: Close a syndicate five year obtain loan of $2 million.
Speaker Change: And in India.
Speaker Change: Or software at five five.
Speaker Change: This is obviously a very renews in demo securities financing of 70% of the project cost.
Speaker Change: For financing was obtained also from Fi deepened International line bounced Cte d'or Val d'or to eight hour shipping Morgan.
Speaker Change: Santander was the other one.
Speaker Change: Ah.
Speaker Change: But for me to reflect somehow.
Speaker Change: Investor confidence in <unk>.
Speaker Change: Hum.
Speaker Change: In the oil processing of Banca Armada as well so I would say good progress I'm very good news with this financing finally being close.
Miguel Galuccio: So I would say good progress and very good news with this financing finally being closed. Yeah, now we have to, the whole thing has to execute. Thank you.
Speaker Change: Yes, now we have to.
Speaker Change: The holding cost you execute.
Speaker Change: Thank you.
Operator: Thank you so much. One moment for our next question.
Speaker Change: Thank you so much for a moment for our next question. Please.
Andres Cardona: and is from Andres Cardona with Citi. Please proceed. Good morning everyone. I just have a question about how much appetite do you have today for potential M&A? And if you can share if the polls are advancing because in the media we are seeing less... Headlines about the matter. Thank you.
Speaker Change: And he is from Andres Cardona with CP. Please proceed.
Andres Cardona: Hi, good morning, everyone.
Speaker Change: I just have a question.
Speaker Change: How much appetite do you have to wait for potentially Monday.
Speaker Change: And if you and if you can share if deposits out of bounds because in the media we are seeing less.
Speaker Change: Kevin <unk> the matter. Thank you.
Miguel Galuccio: Thank you, Andres, for your question. Yes, we are always hungry for the right opportunity. So we are always looking. It's part of our strategic approach. And we have demonstrated that we are as good business development as operators. So. I think given the... The increase of scale and our cash flow profile. we will actively continue assessing opportunities. I would say the only difference is that we have... set a high bar in terms of value accretion and also a strategic fit. So the short answer is yes, you will continue to see us active on all the process and sometimes on things that are not part of the processes.
Speaker Change: Thank you Andre for your question.
Speaker Change: Yes, we are always hungry.
Speaker Change: For the right opportunity.
Speaker Change: So.
Speaker Change: We are always looking at as part of our <unk> approach.
Speaker Change: We have demonstrated that we are.
Speaker Change: We are a good business development us.
Speaker Change: As operators so.
Speaker Change: I assume given the.
Speaker Change: The increase of our scale on our cash flow profile.
Speaker Change: And we will.
Speaker Change: Actively continue assessing opportunities.
Speaker Change: We said the only difference is that we have.
Speaker Change: The highlight in Denmark.
Speaker Change: Ah patient.
Speaker Change: So a strategic fit.
Speaker Change: So the short answer is yes, you will you will continue to see us active.
Speaker Change: On the process on plant diner fees that are not part of the processes.
Miguel Galuccio: But you should expect in terms of value accretion for our shareholders and strategic fit, we continue to be a discipline as we have been so far.
Speaker Change: While you should expect in them all.
Speaker Change: Our value of patients for our shareholders and strategic fit we continue to be disciplined as we have been so far.
Operator: Thanks, Adelaide, for the question.
Speaker Change: Thanks.
Speaker Change:
Speaker Change: Okay.
Tasso Vasconcellos: One moment for our next question, and it comes from Tasso Vasconcellos with UBS. Please proceed. Hi, thanks for taking my question here. The discussion we have the most with investors is related to the capacity to start generating more solid and stable cash flow. The fact that you didn't actually increase the number of wells to be true this year, it is now 59, while before was between 52 to 60. Does it mean you are already seeking to reduce the growth speed and start generating more cash flow as from now? I know we already discussed this a little bit in the previous questions.
Speaker Change: One moment for our next question.
Speaker Change: And he comes from Pascal Vasconcellos with UBS. Please proceed.
Pascal Vasconcellos: Alright, Thanks for taking my question here.
Pascal Vasconcellos: The discussion we have the most with investors related to just the capacity to start generating more solid and stable cash flow.
Pascal Vasconcellos: The fact that you didn't actually increases the number of wells to be true. This year, which is now 59 white before was between 52 to 60 does it mean, you already seeking to reduce the growth speed and start generating more cash flow as from now.
Pascal Vasconcellos: And we already disclosed is a little beating the previous questions. You mentioned the expectation of pretty much neutral cash flow in the second half of this year, maybe an improvement afterward. So can you. Please detail the breakdown for the scenario could you expect more modest production growth and trading but higher cash generation.
Miguel Galuccio: You mentioned the expectation of pretty much neutral cash flow in the second half of this year, maybe an improvement afterward. So, please detail the breakdown for this scenario. Could you expect more modest production growth and wells drilling, but higher cash generation as from 2026? Thank you.
Pascal Vasconcellos: <unk> thousand six thank you.
Miguel Galuccio: All right, Tasso, thank you very much for your great question. First of all, I think for. We basically, we continue, we want to maintain a strong balance sheet. And in, I mean, talking about 2020, talking about this year 2025, where we see toward the end of the year, a more volatile brand and macro scenario. So basically we continue to give clear signal for me what we have just said of capital discipline. We have issued new debt following the acquisition of La Malga Chica. We have increased our leverage ratio. The ratio is still super healthy, but we have to calibrate capital spend.
Pascal Vasconcellos: All right. So thank you very much for your question.
Pascal Vasconcellos: First of all I think for.
Pascal Vasconcellos: We basically we continue.
Pascal Vasconcellos: We want to maintain a strong balance sheet.
Pascal Vasconcellos: I mean talking about 'twenty 'twenty took an RBC of 2025.
Pascal Vasconcellos: Wherever we see towards the end of the year and more volatile brand and micro scenario.
Pascal Vasconcellos: So basically we continue to be clear signal for me, while we have shut set of capital discipline.
Pascal Vasconcellos: We have issued new debt following the acquisition, we got Chica, we have increased our leverage ratio the ratio.
Speaker Change: Stephen it's super healthy, but we have to calibrate capital spend.
Speaker Change: So we our free cash flow neutral. So we have to collaborate that to be cash flow neutral in the second half of the year.
Miguel Galuccio: So we are pre-catch flow neutral. So we have to calibrate that to be catch flow neutral in the second half of the year. And for that we have to also think that next year we need to start to reduce that ratio. So you should expect that you will have a negative free cash flow in Q3 and a positive negative cash flow in Q4 that basically will give you the cash flow line toward the second half of the year. Tasso, does that answer your question? Give me a second. We are prepared for a potential ramp-up of activity in the case that in Q4 we see a better scenario of oil prices.
Speaker Change: And for that we have to also think that next year, we need to start to reduce debt ratios.
Speaker Change: So you should expect that.
Speaker Change: You will have a negative free cash flow in Q3, and a positive and negative cash flow in Q4.
Speaker Change: That basically will give you the cash flow.
Speaker Change: Line.
Speaker Change: For the second half of the year.
Speaker Change: Okay.
Speaker Change: So does that answer your last year, where we might take up we are.
Speaker Change: We are prepared for a potential ramp up of activity in the case that in Q4, we see a bit of a scenario of oil prices.
Miguel Galuccio: And for that, that is easy. Also, you can put in account that in Q4, if we don't see that the scenario, also we could use something that we have done in the past, and we can drill some back wells, for example. So we will look at what is exactly the price scenario, and we will not be shy of modifying what we are presenting today, if we have to do it, because the context is more positive or more negative. And that is the way that you should look at 2025.
Speaker Change: And for that <unk>.
Speaker Change: Also you can put in accounting.
Speaker Change: In Q4.
Speaker Change: If you we don't see that this scenario.
Speaker Change: So we could use something that we have done in the past.
Speaker Change: It can we can there is some tablets for example.
Speaker Change: So.
Speaker Change: We will look at what is exactly that.
Speaker Change: The pricing scenario and we will.
Speaker Change: <unk> B.
Speaker Change: Shied modifying what we have presented today, if we got to do it because the content is more positive or more negative and that is the way that.
Speaker Change: That you should look at 2025 now 2020 onward.
Operator: Now, 2026 onward. with a price scenario of $70, $65, you should look at a cash flow positive and continue growing. That has not changed at all. We are so far a growing story, and we'll continue being a growing story. Okay, that's clear. Thank you. Thank you so much.
Speaker Change: Yeah.
Speaker Change: With the price of an audio of 70 765, you should have got us cash flow positive and continue growing.
Speaker Change: That has not changed at all we are so far a growing story and will continue being a growth story.
Speaker Change: Okay. That's clear thank you I appreciate it.
Speaker Change: Thank you so much of a moment for our next question.
George Gastaut: One moment for our next question. and is from George Gastaut with Latin Securities. Please proceed. Good morning, and thank you for taking my question. I was wondering how much flexibility Vista has to take advantage of stronger local pricing. Specifically, is there room to sell more barrels into the local market if the premium of the export parity holds? Thank you for your question, it's a good one.
George Gasper: And he is from George Gasper with Latin Securities. Please proceed.
George Gasper: Good morning, and thank you for taking my question I was wondering how much flexibility. They still has to take advantage of stronger local pricing.
George Gasper: Specifically is there room to sell more barrels into the local market if the premium over export parity holds.
George Gasper: Thanks for your question.
George Gasper: So look I mean, our strategy has been from.
Miguel Galuccio: So, Lucas, I mean, our strategy has been from day one, I would say, and put in place during COVID-19. is to gradually increase our export volume. Something that when you follow the story of Vista, we have achieved. and today continue to be in the same. Also, I would say credit to the people that managed. to pass the base law, and today they are running the Secretary of Energy. We have seen that a lot of the red tape that was basically making exportation of oil in a country that clearly was in a path to be a structural net exporter.
George Gasper: From day one.
George Gasper: Put in place during COVID-19.
George Gasper: Is to gradually increase.
George Gasper: Our export volumes.
George Gasper: In that when you follow our story of Easter week.
George Gasper: We have achieved.
George Gasper: Today continue to be in the same.
George Gasper: Also we said.
George Gasper: To the people that manish.
George Gasper: Two bus.
George Gasper: The biggest LOE and today they are running.
George Gasper: Later of energy.
George Gasper: We have seen the loan.
George Gasper: Chip.
George Gasper: That was.
George Gasper: Basically, making exportation of oil in a country that theatre awards in <unk>.
George Gasper: And in fact, the net a porter.
Miguel Galuccio: have gone away. And therefore, today is much more seamless to get export volume when we continue serving the local market. So the scenario that you are basically contracting is a scenario of, for me, one that we have lived, of Barril Criollo, where you have local prices above international oil prices. But we have lived with that for a short while.
George Gasper: The only way and therefore today is much more seamless.
George Gasper: To get this per volume when we continue selling.
George Gasper: The local market.
George Gasper: So the scenario that you are basically.
George Gasper: Constructive contracting.
George Gasper: Ethernet scenario for me.
George Gasper: One that we have leaf of bodies earlier, where you have local prices above.
George Gasper: International oil prices.
George Gasper: Sure.
George Gasper: We have lived with that for a short way.
Miguel Galuccio: So if that happened, first of all, the answer to your question is no. It's a simple answer. If that happened, what would we be doing, most of the operators? We will be serving the local market with the same volume that we are receiving the local market today. Historically, each operator has served a couple of refineries. And we continue doing so, even though when the export parity or export prices are higher than the local prices. So if that reverts, we will continue with the same percentage, with the same volumes. Percentages are growing because we are producing more and exporting more.
George Gasper: So if it does happen first of all the answer to your question is no.
George Gasper: The simple answer if it does happen what we'll be doing most of the operators.
George Gasper: It will be settled in the local market with the same volume that we are seeing in the local market today.
George Gasper: Historically each of about $8 cost setup.
George Gasper: <unk>.
George Gasper: A couple of refineries.
George Gasper: And we'll continue doing so.
George Gasper: Even though when the export filings.
George Gasper: Export prices.
George Gasper: Higher.
George Gasper: The local prices so that the rebirth.
George Gasper: We will continue with the same part that presented us with this.
George Gasper: Same volumes, Okay. Four centers are growing because we are producing more and importing more.
Operator: So, the short answer is no, George. Okay, thank you. That's very kind. Thank you.
George Gasper: So the short answer is no.
George Gasper: Okay. Thank you that's very clear.
Speaker Change: Thank you one moment for our next question that comes from Oriana cobalt with balance. Please proceed.
Oriana Cobalt: One moment for our next question that comes from Oriana Cobalt with Balance. Please proceed. Hi, thanks for taking my question.
Oriana Cobalt: Hi, Thanks for taking my question, Lisa you Nicols with balance.
Miguel Galuccio: This is Diana Gold with Balance. I have a question on your free cash for generation precisely, and how should we think in the tax burden in the upcoming quarters? Following the $250 million income tax payments that you made this quarter, are there any remaining tax payments in the remainder of the year? And how should we think of this as a component in your cash buildup in the medium term?
Oriana Cobalt: I have a question on your free cash flow generation precisely and how should we think in the.
Oriana Cobalt: The tax burden.
Oriana Cobalt: Coming quarters.
Oriana Cobalt: Following the 250, new cash pay income tax payments that you made this quarter are there any remaining cash taxes.
Oriana Cobalt: Tax payments in the remainder of the year and how should we think of this as a component in your cash buildup in the intermediate Tim. Thanks.
Miguel Galuccio: Thank you, Oriana, for the question. So, going forward, I think you should think of 35% in contact. Specifically, more specific for this year, we still have pending cash outflow that are related to advance tax payment of approximately 200 to 300 million dollars. and that is included in our free cash flow guidance of this year. So for your model, you should think that way. Thank you. You're welcome. Thank you so much.
Oriana Cobalt: So im sure Odierno for your question so going forward I think you shouldnt think of 35% and contacts.
Oriana Cobalt: Specifically more specific for this year.
Oriana Cobalt: We are still to come.
Oriana Cobalt: Pending cash outflow that are related to advanced tax payment of approximately $200 million to $300 million.
Oriana Cobalt: And that is included in our free cash flow guidance of this year.
Oriana Cobalt: So for your model you should think that way.
Oriana Cobalt: Thank you.
Oriana Cobalt: Vertical okay. Thank you so much.
Matias Cattaruzzi: One moment for our next question. that comes from Matias Cattaruzzi with ADAPTA Security. Hi, Miguel. Can you hear me? Yes, Matias, I can hear you. Great. Well, pleasure to meet you guys.
Oriana Cobalt: A moment for our next question.
Speaker Change: That comes from Matthew <unk> with at <unk> Securities.
Speaker Change: Hi can you hear me.
Speaker Change: Yes, Thank you Greg.
Speaker Change: Pleasure to meet you guys.
Miguel Galuccio: I want to ask about the recent easing in FX restrictions here in Argentina. Do you see a greater flexibility or opportunity to implement a crude oil hedging program, protect cash flows amid the current or what you see at the end of the year, a more market or will you keep with direct exposure to brands as some investors want? Thank you, Matias. Yeah, this question of hedge income... several times in the history of Vista. So our operation is, we like to say, a natural hedge against lower oil price. This hedge, I mean, the way that we're thinking comes from three different drivers.
Speaker Change: Want to ask about the recent.
Speaker Change: <unk> seen FX receipt and the restrictions here and I know from Dina.
Speaker Change: Do you see great our flexibility our opportunity is to implement a hedging program protect cash flows.
Speaker Change: And the current four what you see at the end of the year a more volatile market.
Speaker Change: Or will you keep.
Speaker Change: Direct exposure to Brian.
Speaker Change: Some investors want.
Speaker Change: Thank you Mike <unk> question of <unk> income.
Speaker Change: Several times in the history of Mr. So our operation is.
Speaker Change: We like to say a natural hedge.
Speaker Change: Again lower oil price.
Speaker Change: The sketch I mean, the way that we're thinking come from three different drivers. One I mentioned already is the low cash costs I mentioned in a previous question that is around $20 per barrel.
Miguel Galuccio: One, I mentioned already, is the low cash cost. I mentioned in a previous question that it's around $20 per barrel. The second is the flexibility to reuse CAPEX spend because of our short cycle CAPEX. So we drill well in 14 days, 15 days and we complete that well in another 15, 20 days. The fact that we don't have new capital or regulatory commitment pending differentiates the one that you have in the U.S. So giving these three drivers, we can protect our balance sheet by reducing capex in a lower oil price scenario.
Speaker Change: The second one you the flexibility to reduce capex spend.
Speaker Change: Our short cycle Capex.
Speaker Change: No.
Speaker Change: We drilled a well in 14 days 15 days and we complete the well.
Speaker Change: In another.
Speaker Change: 15 20 days.
Speaker Change: Set it.
Speaker Change: The fact that we will have no capital or regulatory commitment pending differentiate the one that you have in the U S.
Speaker Change: So given that these three drivers we can protect our balance sheet by reducing capex in a lower oil prices scenario.
Miguel Galuccio: Having said this, I think the financial hedges is not easy to implement in the light of existing capital environment of Argentina, the capital control, the previous one. And we said, yes, today we don't have a fast forward. And it will be quite expensive for us if we want to basically hedge our production today. So every time that we have go through that discussion through the sole process, or even we have engaged in an exercise of hedge, the outcome has been that it never makes sense for us to implement it. Okay, great. Thank you so much.
Speaker Change: How do you say leads I seen the financials <unk> is not easy to implement.
Speaker Change: In the light of exiting.
Speaker Change: Capital environment of Argentina.
Speaker Change: Capital control the previous one on it we said yet today, we don't have a path forward.
Speaker Change: And it will be quite expensive for us.
Speaker Change: If we wanted to basically.
Speaker Change: Our production today. So every time that we have goal is to have that discussion.
Speaker Change: So process or even we have engaged in our next set of Seo hedged.
Speaker Change: The outcome has been that it.
Speaker Change: It never makes sense for us to implement it.
Speaker Change: Okay, great and gets so much.
Operator: You're welcome. Thank you. And as a reminder, if you do have a question, simply press star 11 to get in the queue. One moment for our next question.
Speaker Change: Michael.
Speaker Change: Thank you and I'm.
As a reminder, if you do have a question simply press star one one to get in the queue.
Speaker Change: My moment for our next question that is from Francisco <unk> with <unk> capital. Please proceed.
Francisco Cascaron: That is from Francisco Cascaron with Dawn Capital. Please proceed. Hi Miguel, thank you for taking my question. My question is related to the CAPEX. How are you looking at your maintenance CAPEX moving forward? Now that you added La Marga Chica into your portfolio. Thank you, Francisco, for the question and welcome to this call. Assuming basically a production rate that we have for, that we have guide for the second semester, let's say 125,000 views per day. Our calculation is that we need around 50 wells net to Vista. to keep the production flat going forward. And when you take 50 wells and you made a simple mat, that equates approximately to $700, $750 million.
Francisco: Hi, Thank you for taking my question.
Speaker Change: My question is related to the Capex.
Speaker Change: How we are how are you looking at your maintain us capex.
Speaker Change: Forward.
Speaker Change: Now that you've got.
Speaker Change: Cheap.
Speaker Change: Our portfolio.
Speaker Change: Yes. Thank you Francisco for the question and welcome to.
Speaker Change: To this quarter.
Speaker Change: Assuming basically in production rate.
Speaker Change: We have four of them, but we have guided for the second semester, let's say to one country.
Speaker Change: 25.
Speaker Change: South MBA per day.
Speaker Change: Our calculation is we need our own.
Speaker Change: PPD was net to EBITDA.
Speaker Change: To keep the production flat going forward.
Speaker Change: And when you take 50 with anew made it simple math.
Speaker Change: That equates to approximately $2 700 $750 million of Capex.
Miguel Galuccio: So that is what you should think if you ever come to that scenario. I have answered your question, Francisco, I guess. Yes, perfect. Thank you. You're welcome. Thank you so much.
Speaker Change: So that is which you should think in.
Speaker Change: If we ever come to the scenario.
Francisco: I can answer your question Francisco.
Francisco: Yes, perfect. Thank you.
Francisco: Thank you so much and this ends our Q&A session for today.
Operator: And this ends our Q&A session for today.
Miguel Galuccio: I will pass it back to Miguel for final remarks. Well, gentlemen and ladies, thank you very much for showing and for supporting us and for continue covering Vista. Neither to say that we, the full team of Vista, we are super excited about this acquisition and also I mean, to see on those numbers on this call, this quarter and the quarters to come, the scale that we have to take with the acquisition of Amarga Chica. So thank you very much for the comments, the coverage, and the questions.
Miguel Olea: Pass it back to Miguel for final remarks.
Miguel Olea: Okay.
Miguel Olea: Hello, gentlemen, and ladies thank you very much for showing and for supporting us for continue covering Vista, neither to say that we.
Miguel Olea: On the <unk> that we are super excited about.
Miguel Olea: This acquisition and also.
Miguel Olea: <unk>.
Miguel Olea: I mean, we could see on those numbers on this call.
Speaker Change: This quarter in the quarters to come the scale that we have today with the wood acquisition Margaret Chico.
Speaker Change: Thank you very much for the comments the coverage on the question.
Operator: Have a very good day.
Speaker Change: Very good day.
Operator: Thank you, ladies and gentlemen, and this concludes our program for today. You may all disconnect. Have a great day, everyone.
Speaker Change: Thank you, ladies and gentlemen, and this concludes our program for today you may all disconnect have a great day everyone.
Speaker Change: [music].
Speaker Change: Hello, everyone and welcome to the <unk> second quarter 2025 earnings call.
Speaker Change: 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 participate you will need to press star one and one on your telephone.
Operator: To participate, you will need to press star 1-1 on your telephone. You will then hear a message advising your hand is raised. To withdraw your question, simply press star 1 1.
Speaker Change: You will then hear a message advise senior Handless raced to withdraw your question simply press Star one one again please.
Operator: Please note, this event is being recorded.
Speaker Change: Please note this event is being recorded.
Alejandro Chernakov: Now it's my pleasure to turn the call over to Business Strategic Planning and IRO, Alejandro Chernakov. Thanks. Good morning, everyone.
Speaker Change: Now, it's my pleasure to turn the call over to Mr. Strategic planning and I are old Alejandro China Kos. Please proceed.
Speaker Change: Thanks. Good morning, everyone. We are happy to welcome you to restart the second quarter of 2025 results Conference call I'm here with me <unk>, <unk>, Chairman and CEO Pablo without being dealt with us CFO one got it.
Alejandro Chernakov: We are happy to welcome you to Vista's second quarter of 2025 results conference. I am here with Miguel Galuccio, Vista's Chairman and CEO, Pablo Vera Pinto, Vista's CFO, Juan Garobi, Vista's CTO, and Matias Huesel, Vista's COO.
Speaker Change: CTO <unk> CLO.
Alejandro Chernakov: Before we begin, I would like to draw your attention to a cautionary statement on slide Please be advised that our remarks today, including the answers to your questions, may include forward-looking. These forward-looking statements are subject to risks and uncertainties that could cause actual results to be materially different from the expectations contemplated by the Our financial figures are stated in U.S. dollars and in accordance with International Financial Reporting Standards, IFRS. However, during this conference call, we may discuss certain non-IFRS financial measures such as adjusted expenses. Reconciliations of these measures to the closest IFRS measures can be found in the earnings release that we issued yesterday.
Speaker Change: Before we begin I would like to grow your attention to our cautionary statement on slide two.
Speaker Change: Please be advised that our remarks today, including the answers to your questions may include forward looking statements.
Speaker Change: These forward looking statements are subject to risks and uncertainties that could cause actual results to be materially different from the expectations contemplated by these remarks, our financial figures are stated in U S dollars and in accordance with international financial reporting standards <unk>.
Speaker Change: However, during this conference call, we may discuss certain non <unk> financial measures such as adjusted EBITDA.
Speaker Change: Reconciliations of these measures to the closest branch measures can be found in the earnings release that we issued yesterday. Please check our website portfolio information.
Alejandro Chernakov: Please check our website for further information.
Alejandro Chernakov: Our company is the Sociedad Anónima Bursátil de Capital Variable, organized under the laws of Mexico, registered in the Bolsa Mexicana de Valores and the New York. Our tickets are Vista in the Bolsa Mexicana de Valores and BIST in the New York City.
Speaker Change: Company is a software only model starting the capital or the outlet organized under the laws of Mexico registering there was some kind of a loaded and the New York Stock Exchange I think you guys are restarting their work that make you kind of evaluate and be Isd in the New York stock exchange.
Alejandro Chernakov: As explained in our earnings released yesterday afternoon, please be advised that the operating and financial metrics shown in this presentation reflect the effects of consolidating the acquisition of Petronas Argentina as of April 1, 2020.
Speaker Change: As explained in our earnings release yesterday afternoon.
Speaker Change: The operating and financial metrics shown in this presentation reflect the effect of consolidating the acquisition of Petrobras Argentina as of April 2025.
Alejandro Chernakov: Finally, note that, as of this webcast, we have moved all definitions, which were previously at the bottom of each slide, to an appendix at the end of the presentation.
Speaker Change: Finally note that as of this webcast. We have moved all the financials, which were previously at the bottom of the slide two an appendix at the end of the presentation.
Alejandro Chernakov: I will now tell the corner over to Miguel. Thanks, Ale.
Speaker Change: I will now turn the corner over at the window.
Speaker Change: Thank you Kelly good morning, everyone and welcome to the 17 call.
Miguel Galuccio: Good morning, everyone, and welcome to Discerning Call. Q2 2025 was transformational for our company, as we completed the acquisition of 50% stake in La Marga Chica, the second largest oil production block in Bacamorga. This transaction has turned Vista into a significantly larger company. Boosted by this acquisition, Q2 total production was 118,000 VOEs per day. an increase of 81% year over year. Oil production was 102,000 barrels per day, 79% year over year. Vista is now the largest independent oil producer and the largest oil exporter in Argentina. Total revenues during the quarter were $611 million, 54% above the same quarter of last year.
Speaker Change: Q2, 2025 was transformational for our company as.
Speaker Change: As we completed the acquisition of 50% stake in La <unk> Chica, the second largest oil production block in <unk>.
Speaker Change: These transaction cost.
Speaker Change: Each a significantly larger company.
Speaker Change: By this acquisition Q2 total production was one carried 18000 boe's per day.
Speaker Change: Increase of 81% year over year.
Speaker Change: Oil production was 102 selves imbalance per day, 79% year over year.
Speaker Change: Is now the largest independent oil producer and the largest oil exporter in Argentina.
Speaker Change: Total revenues during the quarter were $611 million, 54% above the same quarter of last year.
Miguel Galuccio: Lifting cost was $4.7 per DOE, 4% above year-over-year. Capital expenditure was $356 million, driven by the ramp-up in new oil activity during the quarter, both in Vista Operated Block and in La Marga Church. Ajuste DVDA was $405 million, an inter-annual increase of 40%. Net income was $235 million, including $102 million related to one-off, mainly related to the Petronas Argentina acquisition. Earnings per share were $2.3. Free cash outflow in this quarter was $1.4 billion, mostly reflected that from cash payment of the Petronas Argentina acquisition. Finally, net leverage ratio at the quarter end was 1.38 times on a performance basis, reflecting the new debt rate to finance this cash payment.
Speaker Change: Lifting cost was $4 $7 per Boe.
Speaker Change: Our percent above year over year.
Speaker Change: Capital expenditure was $356 million.
Speaker Change: Driven by the ramp up you will activity during the quarter both in the operated block and in America Cheetah.
Speaker Change: Adjusted EBITDA was $405 million in debtor annual increase of 40%.
Speaker Change: Net income was $275 million, including $102 million related to one off mainly related to the better than us ashamed in acquisition.
Speaker Change: Earnings per share were $2 $3.
Speaker Change: Free cash flow outflow in this quarter it was $1 4 million.
Speaker Change: Mosley reflected strong cash payment of the Petronas Argentina's precision.
Speaker Change: Finally, net leverage ratio at quarter end was 138 times on a pro forma basis, reflecting the new debt raised to finance these cash payments.
Miguel Galuccio: During Q2, we made solid progress on the operational front. We will activate pickups sequentially, with 24 wells connected during the quarter, 8 in Bajada del Palo Este, 4 in Bajada del Palo Este, and 12 corresponding to our 50% working interest in La Marga Churro. We continue to see the result of our strong focus on cost efficiency. We made decisive progress in reducing new oil costs, capturing savings through innovation and efficiency. changes to our contract strategy and contract renegotiations for specific consumables and services. This has led to a new drilling and completion cost of $12.8 million per well, representing a saving of $1.4 million per well, or 10%, which will be reflected in our cost of a new well starting in Q3 2024.
Speaker Change: During Q2, we made solid progress on the operational front.
Speaker Change: You will activity pick up sequentially with 24 wells connected during the quarter.
Speaker Change: In Bajada del Palo Este for in Bajada del Palo Este, and 12 corresponding to our 50% working interest in the amount of <unk> chica.
Speaker Change: We continue to see that we saw that with our strong focus on cost efficiency.
Speaker Change: We may decisive progress in reuse you will cost capturing savings through innovation and efficiency change.
Speaker Change: Changes to our contracting strategy and contract renegotiations for a specific consumables and services.
Speaker Change: This has led to a new drilling and completion cost of $12 $8 million.
Speaker Change: Representing a savings of $1 4 million per well.
Speaker Change: 10%, which will be reflected in our cost of a new with 17 in Q3 2025.
Miguel Galuccio: Following the inauguration of Old Elbal Duplicar Pipeline in March, we eliminated all tracking as of April 1st. This led to a $41 million saving compared to Q4 2024. substantially improving our market. Total production was 118,000 VOEs per day, a sequential increase of 46% and inter-annual increase of 81%. These reflect the solid execution of our new well campaign, as we connected 47 new wells in the last 12 months, and the consolidation of La Marga Chica production as of April 1st. Oil production was 102.2 thousand barrels of oil per day, 79% above year-over-year and 47% above Q1.
Speaker Change: Following in our Asian wholesale while duplicate by line in March we eliminated all tracking as of April one.
Speaker Change: This led to a $41 million saving compared to Q4 24.
Speaker Change: Substantially improving our margins.
Speaker Change: Total production was 118000 Boe's per day, a sequential increase of 46% inter annual increase of 81%.
Speaker Change: These reflect the solid execution of our new Wood campaign, we connected 47, new wells in the last 12 months.
Speaker Change: The consolidation of La <unk> Chica production as of April 1st.
Speaker Change: Oil production was $102 2000 barrels of oil per day, 79% above year over year and 47% above Q1.
Miguel Galuccio: Gas production increased 93% on an inter-annual basis and 44% on a sequential basis. In Q2 2025, total revenues were $611 million, 50% higher year-over-year, driven by the strong increase in oil production, which more than offset lower oil prices. Oil exports tripled year-over-year to 5.6 million barrels for the quarter, boosted by the production growth and the acquisition of La Marga Chica. realized oil price was $62.2 per barrel on average, down 13% on interannual basis, mainly driven by the lower international prices. During Q2, 100% of oil volumes sold were at export parity prices. Lifting cost during Q2 was $4.7 per VOE, sequentially flat, reflecting our continued focus on cost control.
Speaker Change: Gas production increased 93% on an annual basis and 44% on a sequential basis.
Speaker Change: In Q2, 2025, total revenues were $611 million, 50% higher year over year, driven by the strong increase in oil production, which more than offset lower oil prices.
Speaker Change: Oil export triple year over year to $5 6 million.
Speaker Change: Medium borrowers for the quarter.
Speaker Change: Boosted by the production growth and acquisition of La <unk> Chica.
Speaker Change: Realized oil price was $62 $2 per Nevada, <unk> down 13% on an annual basis, mainly driven by the lower international prices.
Speaker Change: During Q2, 100% of oil volumes sold.
Speaker Change: Export parity prices.
Speaker Change: Lifting cost during Q2 was $4 $7 per.
Speaker Change: Sequentially flat, reflecting our continued focus on cost control.
Miguel Galuccio: Selling expenses per VOE came down 41% quarter over quarter, reflecting the elimination of oil tracking as of April 1. This led to a saving of 28 million dollars vis-a-vis Q1. and $41 million vis-a-vis Q4 2024, the quarter during which tracking volumes peaked. Adjusted EVDA during the quarter was $405 million, 40% higher on an inter-annual basis, driven by the production increase in our operating blocks and the consolidation of 50% working interest in La Marga. On a sequential basis, adjusted EVDA margin increased 4% match point, and net back remained flat as the elimination of oil tracking offset lowered oil prices.
Speaker Change: Selling expenses for the UAE came down 41% quarter over quarter.
Speaker Change: Selecting the elimination of all tracking as of April 1st.
Speaker Change: This led to a savings of $28 million vis vis Q1.
Speaker Change: $41 million <unk> Q4, 2020 for the quarter during which trucking volumes peaked.
Speaker Change: Adjusted EBITDA during the quarter was $405 million $40, St <unk> hundred 90 day or annual basis.
Speaker Change: By the production increase in our operating blocks and the consolidation of 50% working interest in La <unk> Chica.
Speaker Change: On a sequential basis adjusted EBITDA margin increased 4% much point on netback remained flat as the elimination of all interacting offset lower oil prices.
Miguel Galuccio: During Q2 2025, cash flow from operating activities was minus $9 million. reflecting in-contact payment of $250 million. $59 million increase in working capital and payments for maintenance pensions of $18 million. Cash flow used in investing activities was $1,347 million, reflecting a crude capex of $356 million. an increase of $140 million in working capital and the acquisition of Petronas Argentina for $842 million net. The free cash outflow during the quarter was $1.4 billion, mostly reflecting the upfront payment of Petronas Argentina. Cash flow from financing activities was $770 million. reflecting the proceeds from borrowings of $1,379 million and partially offset by the repayment of borrowings of $514 million.
Speaker Change: During Q2 2025 cash flow from operating activities was minus $9 million.
Speaker Change: Reflecting income tax payment of $250 million.
Speaker Change: A $59 million increase in working capital and payments for maintenance bancshares of $18 million.
Speaker Change: Cash flow used in investing activities was 1340 $7 million.
Speaker Change: <unk> accrued capex of $356 million.
Speaker Change: An increase of $140 million in working capital and acquisition of better announced Argentina for $842 million net.
Speaker Change: The free cash outflow during the quarter was $1 4 billion.
Speaker Change: Mostly reflecting the upfront payment of Petronas Argentina.
Speaker Change: Cash flow from financing activities was $770 million.
Speaker Change: Reflecting the proceeds from borrowings of 1370 $9 million.
Speaker Change: Im partially offset by the repayment of borrowings of $514 million.
Miguel Galuccio: After quarter-end, we have signed three-term loans with local and international banks for a total of $500 million to cancel all understanding maturities in the second half of 2025 and early 2026. Finally, cash at period end was $154 million. Net leverage ratio on a performance based in reflecting the patronage transaction stood at 1.38 times adjusted FDA.
Speaker Change: After quarter end, we have signed three term loans, we look as an international bank for a total of $500 million to cancel all understanding maturities in the second half of 2025 in early 2026.
Speaker Change: Finally cash at period end was $154 million.
Speaker Change: Net leverage ratio on a pro forma basis, reflecting the <unk> transaction is stood at 138 times adjusted EBITDA.
Miguel Galuccio: Our updated annual guidance reflects that, following the acquisition of La Marga Chica, we have emerged as a company with a larger scale and a stronger cash flow generation. Total production in 2025 is forecast between 112,000 and 114,000 BOE per day. Based on the planned well tie-ins, we forecast between 125,000 and 128,000 VOEs per day for the second semester. which leaves us with well-positioned for a greater start in 2022. Assati DBA is forecast between $1.5 and $1.6 billion for the year, assuming $65 rent for the second semester, equivalent to $60 per barrel of rail light price.
Speaker Change: Our updated annual guidance reflects debt following the acquisition of La <unk> Chica, we have emerged as a company, we lost shows Kate and stronger cash flow generation.
Speaker Change: Total production in 2025 is forecast between one country and 12 and 114000 Boe per day.
Speaker Change: Based on the planned well tie ins, we forecast between one company on <unk> 102000, <unk> per day for the second semester.
Speaker Change: Which leaves us well positioned for a great start in 2026.
Speaker Change: Adjusted EBITDA is forecast between one five and $1 6 billion for the year.
Speaker Change: Assuming $65 Brent for the second cement that equivalent to $60 per Nevada of realized price.
Miguel Galuccio: A change in $5 per barrel of realized oil price in the second half of the year results in a change in adjusted EVDA of $80 million. During the second semester, we forecast $825 to $925 million of adjusted EVDA, or $1.65 to $1.85 billion on analyzed run rate basis. To deliver this plan, we forecast to connect 59 new wells during the year, of which 34 were connected in the first semester, combining our operating block with our working interest in La Marga Chur. CAPEC in this plan is forecast at $1.2 billion for the year. These reflect our new drilling and completion costs and $60 million of savings in facilities compared to the original 2025 guidance.
Speaker Change: A change in $5 per lateral of realized oil price in the second half of the year result in a change in adjusted EBITDA of $80 million.
Speaker Change: During the second semester, we forecast a $125 million to $925 million of adjusted EBITDA or $1 65 to one eight.
Speaker Change: $85 billion or an annualized run rate basis.
Speaker Change: To deliver this plan, we forecast to connect 59, new wells during the year of which 34 were connected in the first semester, combining our operating block with our work in this and the amount of got Chico.
Speaker Change: Capex in this plan is forecast by $1 $2 billion for the year.
Speaker Change: This reflects our new drilling and completion cost.
Speaker Change: On $60 million of say medium facilities compared to the original 2025 guidance.
Miguel Galuccio: Our new 2025 plan represents an improvement to the original plan. $60 realizable price, we are forecasting a neutral free cash flow during the second half of the year composed of negative free cash flow in Q3 and positive free cash flow in Q4. evidencing a strong capital discipline in the context of high oil price volatility. Compared to the original guidance for the year, we are now forecasting to deliver 16% more production and 70% more adjusted EVDA at $65 rent while maintaining the same capex level. The projected growth for 2025 compared to 2024 is 62% for production and 41% for adjusted EVDA.
Speaker Change: Our new 2025 planned represent an improvement to the original plan.
Speaker Change: Ah $60 realized price we are forecasting a note that our free cash flow during the second half of the year compose of negative free cash flow in Q3.
Speaker Change: Positive free cash flow in Q4.
Speaker Change: <unk> strong capital discipline in the context of high oil price volatility.
Speaker Change: Compared to the original guidance for the year, we are now forecasting to deliver 16% more production and 70% more adjusted EBITDA of $65, Brent while maintaining the same capex levels.
Speaker Change: Projected growth for 2025 compared to 2020 is 62% from production and 41% for adjusted EBITDA.