Q2 2026 Vista Energy SAB de CV Earnings Call

Operator: Good day everyone, thank you for standing by. Welcome to Vista's Q2 2026 earnings webcast. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. To ask a question, you will need to press *11 on your telephone. You will then hear a message advising your hand is raised. To withdraw your question, please press *11 again. Please be advised that today's conference is being recorded. Now it's my pleasure to hand the conference to Vista's Strategic Planning and Investor Relations Officer, Alejandro Cherñacov. Please proceed.

Speaker #1: Good day, everyone, and thank you for standing by. Welcome to Vista's second quarter 2026 earnings webcast. At this time, all participants are in a listen-only mode.

Speaker #1: After the speaker's presentation, there will be a question-and-answer session. To ask a question, you will need to press star 1-1 on your telephone. You will then hear a message advising your hand is raised.

Speaker #1: To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded. Now, it's my pleasure to hand the conference to Vista's Strategic Planning and Investor Relations Officer, Alejandro Chernakov.

Speaker #1: Please proceed.

Speaker #2: Thanks. Good morning, everyone. We are happy to welcome you to Vista's second quarter 2026 results conference call. I am here with Miguel Galuccio, Vista's Chairman and CEO, Pablo Vera-Pinto, Vista's CFO, Juan Garobi, Vista's CTO, and Matías Weisel, Vista's COO.

Alejandro Cherñacov: Thanks. Good morning, everyone. We are happy to welcome you to Vista's Q2 2026 results conference call. I am here with Miguel Galuccio, Vista's Chairman and CEO, Pablo Vera Pinto, Vista's CFO, Juan Garoby, Vista's CTO, and Matías Weissel, Vista's COO. Before we begin, I would like to draw your attention to our cautionary statement on slide two. Please be advised that our remarks today, including the answers to your questions, may include forward-looking statements. These forward-looking statements are subject to risks and uncertainties that could cause actual results to be materially different from the expectations contemplated by these remarks. Our financial figures are stated in US 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 EBITDA and adjusted net income.

Speaker #2: Before we begin, I would like to draw your attention to our cautionary statement on slide 2. Please be advised that our remarks today, including the answers to your questions, may include forward-looking statements.

Speaker #2: 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 #2: Our financial figures are stated in US 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 EBITDA and adjusted net income.

Speaker #2: Reconciliations of these measures to the closest IFRS measure can be found in the earnings release that we issued yesterday. Please check our website for further information.

Alejandro Cherñacov: Reconciliations of these measures to the closest IFRS measure can be found in the earnings release that we issued yesterday. Please check our website for further information. Our company is a Sociedad Anónima Bursátil de Capital Variable, organized under the laws of Mexico, registered in the Bolsa Mexicana de Valores and the New York Stock Exchange. Our tickers are VISTA in the Bolsa Mexicana de Valores, and VIST in the New York Stock Exchange. I will now turn the call over to Miguel.

Speaker #2: Our company is a sociedad anónima bursátil de capital variable, organized under the laws of Mexico, registered on the Bolsa Mexicana de Valores and the New York Stock Exchange.

Speaker #2: Our tickers are VISTA on the Bolsa Mexicana de Valores and BIST on the New York Stock Exchange. I will now turn the call over to Miguel.

Speaker #3: Thanks, Ale. Good morning and welcome to this earnings call. The second quarter of 2026 was marked by the closing of the acquisition of the Equinor asset in Vaca Muerta.

Miguel Galuccio: Thanks, Ale. Good morning, welcome to this earnings call. The Q2 2026 was marked by the closing of the acquisition of Equinor asset in Vaca Muerta. This milestone, in combination with the organic growth, took our company to a new scale, leaving us in an excellent position to capture the upside of higher oil prices. As a result, adjusted EBITDA and free cash flow generation record substantial interannual and sequential increases. Total production was 156,000 barrels per day, 32% above the previous year. Oil production was 135,000 barrels per day, up 33% vis-à-vis the previous year. Total revenues during the quarter were $1.15 billion, an impressive growth of 89% compared to the same quarter of last year. Lifting cost was $4.5 per BOE, 4% below year-over-year. Capital expenditure was $467 million, driven by a strong progress in new well activities during the quarter.

Speaker #3: This milestone, in combination with the organic growth, took our company to a new scale, leaving us in an excellent position to capture the upside of higher oil prices.

Speaker #3: As a result, adjusted EBITDA and free cash flow generation recorded substantial interannual and sequential increases. Total production was 156,000 USD per day, 32% above the previous year.

Speaker #3: Oil production was 135,000 barrels per day, up 33% vis-à-vis the previous year. Total revenues during the quarter were $1.15 billion, an impressive growth of 89% compared to the same quarter of last year.

Speaker #3: Lifting cost was $4.5 per BOE, 4% below year-over-year. Capital expenditure was $467 million, driven by strong progress in new oil activities during the quarter.

Speaker #3: Adjusted EBITDA was $805 million, an interannual increase of 99%. Net income was $322 million, an increase of 37% compared to the same quarter of last year and 199% versus the previous quarter.

Miguel Galuccio: Adjusted EBITDA was $805 million, an interannual increase of 99%. Net income was $322 million, an increase of 37% compared to the same quarter of last year, and 199% versus the previous quarter. Including the gain from La Amarga Chica acquisition in Q2 2025, net income expanded by more than nine times year over year. We record earnings per share of $3 during the quarter. Net of the Equinor acquisition payment, free cash flow was $491 million, reflecting a significant boost in adjusted EBITDA generation and a meaningful improvement in working capital. Finally, our net leverage ratio at quarter end was 1.41 times adjusted EBITDA. On a pro forma basis, reflecting last 12 months figures for the acquired asset, the ratio was 1.25 times adjusted EBITDA, marking a significant reduction year on year and reflecting a very strong balance sheet. Total production during Q2 averaged 156.1 thousand BOEs per day.

Speaker #3: Excluding the gain from the La Marga Chica acquisition in Q2 2025, net income expanded by more than nine times year-over-year. We recorded earnings per share of $3 during the quarter.

Speaker #3: Net of the Equinor acquisition payment, free cash flow was $491 million, reflecting a significant boost in adjusted EBITDA generation and a meaningful improvement in working capital.

Speaker #3: Finally, our net leverage ratio at quarter-end was 1.41 times adjusted EBITDA. On a pro forma basis, reflecting last 12 months' figures for the acquired assets, the ratio was 1.25 times adjusted EBITDA, marking a significant reduction year-on-year and reflecting a very strong balance sheet.

Speaker #3: Total production during Q2 averaged 156.1 thousand BOEs per day. This represents a year-over-year increase of 32% and a sequential increase of 16%. There are two drivers behind this boost.

Miguel Galuccio: This represents an interannual increase of 32% and a sequential increase of 16%. There are two drivers behind this boost. The first is organic growth. We connected 19 new wells in the last 12 months with very solid productivity, generating a 20% production growth compared to Q2 last year. On top of this, the consolidation of our working interest in Bandurria Sur and Bajada del Toro as of 1 May added 14.2 thousand barrels of oil equivalent per day on average for the quarter. This reflects a run rate about 21,000 BOEs per day, which will impact fully in Q3. Our total production in May and June was on average 161.6 thousand BOEs per day. Quarterly average oil production was 135.4 thousand barrels per day, 33% higher year over year and 16% above the previous quarter. Gas production increased 30% on an interannual basis and 15% sequentially.

Speaker #3: The first is organic growth. We connected 19 new wells in the last 12 months with very solid productivity, generating 20% production growth compared to Q2 last year.

Speaker #3: On top of this, the consolidation of our working interests in Mandurria Sur, Ambajada del Toro, as of May 1, added 14.2 thousand barrels of oil equivalent per day on average for the quarter. This reflects a run rate of about 21,000 BOEs per day, which will impact fully in the third quarter.

Speaker #3: Our total production in May and June was, on average, 161.6 thousand BOE per day. Quarterly average oil production was 135.4 thousand barrels per day, 33% higher year-over-year, and 60% above the previous quarter.

Speaker #3: Gas production increased 30% on an interannual basis and 15% sequentially. Total revenues during Q2 were $1.15 billion, representing material growth of 89% compared to the previous year and 66% versus the previous quarter.

Miguel Galuccio: Total revenues during Q2 were $1.15 billion, a material growth of 89% compared to the previous year and 66% versus the previous quarter, driven by a solid increase in oil production and higher oil prices. Oil export increased 54% year over year, reaching 8.6 million barrels in the quarter, representing 72% of our oil sales volume. Realized oil prices in Q2 was $89.4 per barrel, 44% above the previous year and 49% above the previous quarter, in both cases driven by higher Brent and an improvement in differentials. We sold 100% of our oil volumes at export parity prices both domestically and internationally. In Q2, lifting cost was $4.5 per BOE, an interannual reduction of 4%, reflecting our low-cost asset base and fixed cost dilution as we continue to gain scale.

Speaker #3: Driven by a solid increase in oil production and higher oil prices, oil exports increased 54% year-over-year, reaching 8.6 million barrels in the quarter, representing 72% of our oil sales volume.

Speaker #3: Radice oil prices in Q2 were $89.4 per barrel, 44% above the previous year and 49% above the previous quarter. In both cases, this was driven by higher Brent prices and an improvement in differentials.

Speaker #3: We sold 100% of our oil volumes at export parity prices both domestically and internationally. In Q2, lifting cost was $4.50 per BOE, an interannual reduction of 4%, reflecting our low-cost asset base and fixed cost dilution as we continue to gain scale.

Speaker #3: On a sequential basis, listing cost increased, driven by the impact of inflation on peso-denominated goods and services amid flat FX rates. Selling expenses were $4.10 per BOE, an 8% increase year-over-year, mainly driven by higher oil prices impacting turnover tax.

Miguel Galuccio: On a sequential basis, lifting costs increased, driven by the impact of inflation on peso-denominated goods and services amid flat FX rates. Selling expenses were $4.1 per BOE, an 8% increase year over year, mainly driven by higher oil prices impacting turnover tax. Adjusted EBITDA during the quarter was $805 million, 99% higher interannually and 79% higher sequentially, driven by a material expansion of revenues amid flat unit cost. Similarly, adjusted EBITDA margin was 70%, an expansion of three percentage points compared to the same quarter of last year, and five percentage points above the previous quarter. Netback increased 51% year over year to $57 per BOE. In Q2 2026, cash flow from operating activities was $985 million, reflecting a decrease in working capital of $274 million, mostly driven by the full normalization of the working capital position of our trading subsidiary, Beisa.

Speaker #3: Adjusted EBITDA during the quarter was $805 million, 99% higher year-over-year and 79% higher sequentially, driven by a material expansion of revenues amid flat unit cost.

Speaker #3: Similarly, adjusted EBITDA margin was 70%, an expansion of 3 percentage points compared to the same quarter last year, and 5 percentage points above the previous quarter.

Speaker #3: Netback increased 51% year-over-year to $57 per BOE. In Q2 2026, cash flow from operating activities was $985 million, reflecting a decrease in working capital of $274 million, mostly driven by the full normalization of the working capital position of our trading subsidiary, VESA.

Speaker #3: We also made an income tax payment of 53 million dollars. Cash flow used in investment activities was 886 million dollars reflecting accrued capex of 467 million dollars the 392 million dollars payment related to the Equinor acquisition and an increase in capex related working capital of 21 million dollars.

Miguel Galuccio: We also made an income tax payment of $53 million. Cash flow used in investing activities was $886 million, reflecting accrued CapEx of $467 million, the $392 million payment related to the Equinor acquisition, and an increase in capital working capital of $21 million. Net of the Equinor acquisition, free cash flow was $491 million during the quarter, leaving us well-placed to deliver on our annual guidance. Cash flow from financing activities was -$110 million, driven by the repayment of borrowings for $810 million and interest payments of $88 million, partially offset by proceeds from borrowings for $856 million. Finally, our cash position remains very strong, standing at $605 million at the end of Q2. Our net leverage ratio stood at 1.41x adjusted EBITDA, or 1.25 on a pro forma basis considering the last 12 months of adjusted EBITDA for the acquired assets.

Speaker #3: Net of the Equinor acquisition, free cash flow was $491 million during the quarter, leaving us well placed to deliver on our annual guidance.

Speaker #3: Cash flow from financing activities was negative $110 million, driven by the repayment of borrowings for $810 million and interest payments of $88 million, partially offset by proceeds from borrowings for $856 million.

Speaker #3: Finally, our cash position remains very strong. Standing at $605 million at the end of Q2, our net leverage ratio stood at 1.41 times adjusted EBITDA, or 1.25 on a pro forma basis considering the last 12 months of adjusted EBITDA for the acquired assets.

Speaker #3: To conclude this call, and before we move to Q&A, I will make some closing remarks. During Q2, we materially increased the scale of our company.

Miguel Galuccio: To conclude this call, before we move to Q&A, I will make some closing remarks. During Q2, we materially increased the scale of our company on the back of a solid organic growth and the successful closing of the acquisition of our interest in the Bandurria Sur and Bajada del Toro blocks in Vaca Muerta. This allow us to capture the benefit of the oil price spike in Q2, leading to a substantial boost to adjusted EBITDA and free cash flow generation. In line with our capital allocation framework, we plan to use part of the free cash flow to reduce our net leverage ratio to our target of around 1x by the end of the year. We made very good progress on our annual work program and are well on track to deliver our 2026 guidance.

Speaker #3: On the back of solid organic growth and the successful closing of the acquisition of our interest in the Mandurria Sur and Ambajada del Toro blocks in Vaca Muerta.

Speaker #3: This allowed us to capture the benefit of the oil price spike in Q2, leading to a substantial boost to adjusted EBITDA and free cash flow generation.

Speaker #3: In line with our capital allocation framework, we plan to use part of the free cash flow to reduce our net leverage ratio to our target of around 1x by the end of the year.

Speaker #3: We made very good progress on our annual work program and are well on track to deliver our 2026 guidance. We are maintaining our $3 billion adjusted EBITDA guidance at $85 per barrel as of now, but I want to provide a sensitivity due to the prevailing volatility in oil prices.

Miguel Galuccio: We are maintaining our $3 billion adjusted EBITDA guidance at $85 per barrel as of now, I want to provide a sensitivity due to the prevailing volatility in oil prices. For every $10 per barrel change in the H2, adjusted EBITDA changes approximately $200 million. Before we move to Q&A, I would like to thank all Vista employees for their hard work during the quarter, as well as our investors for their continued support. Operator, we can now move to Q&A.

Speaker #3: For every $10 per barrel change in the second semester, adjusted EBITDA changes approximately $200 million. Before we move to Q&A, I would like to thank all Vista employees for their hard work during the quarter, as well as our investors for their continued support.

Speaker #3: Operator, we can now move to Q&A.

Speaker #1: Thank you so much. As a reminder, to ask a question simply press star one-one (*11) to get in the queue and wait for your name to be announced.

Operator: Thank you so much. As a reminder, to ask a question, simply press star one one to get in the queue and wait for your name to be announced. To withdraw your question, press star one one again. Our first question is from Alejandro Demichelis with Jefferies. Please proceed.

Speaker #1: To withdraw your question, press star one one again. Our first question is from Alejandro Demichelis with Jefferies. Please proceed.

Speaker #2: Yes, good morning, gentlemen. Thank you very much for taking my question. Miguel, one question, please. You have just consolidated just Mandurria Sur and Bajo del Toro.

Alejandro Demichelis: Yes. Good morning, gentlemen. Thank you very much for taking my question. Miguel, one question, please. You just have consolidated Chad Bandurria Sur and Bajada del Toro. Could you please provide some kind of color of how that is going and how you're seeing the development of these assets going forward, please? Thank you.

Speaker #2: Could you please provide some color on how that is going, and how you see the development of these assets going forward, please?

Speaker #2: Thank you. Hi, Ale, thank you very much for the question. Yeah, we took over our share in the asset in May, and everything, I have to say, is moving along as we expected.

Miguel Galuccio: Hi, Ale. Thank you very much for the question. Yeah, we took over our share in the asset in May, and everything I have to say is moving along as we expected. Our share was consolidated approximately 19,000 BOE per day in Bandurria Sur and 2,000 BOE per day in Bajada del Toro. In Bandurria Sur, actually, we have three rigs running, so you can expect production to remain relatively flat or maybe it can grow slightly toward the end of the year. We are also starting the discussion with our partner, YPF, regarding the plan for 2027. Bajada del Toro, as you know, is an appraisal block.

Speaker #2: Our share was consolidated at approximately 19,000 BOE per day in Mandurria Sur and 2,000 BOE per day in Bajada del Toro. In Mandurria Sur, actually, we have three rigs running, so you can expect production to remain relatively flat, or maybe it can grow slightly toward the end of the year.

Speaker #2: We are also starting discussions with our partners, YPF, regarding the plan for 2027. Bajada del Toro, as you know, is an appraisal block.

Speaker #2: The plan we are analyzing with YPF is to file rig applications this year, and over the next two years we will then drill some pilot wells to de-risk some of the areas and land the zone.

Miguel Galuccio: The plan we are analyzing with YPF is to file reapplication this year, and over the next two years, we will then drill some pilot well to release some of the areas and land this on, and start to contract the facilities based on what we believe could be the production of the block. We will then, as we said, plan to move to full development and contract and put some dedicated rig to develop Bajada del Toro. Thanks, Ali, for your question.

Speaker #2: And start to contract the facilities based on what we believe could be the production of the block. And then I will set a plan to move to full development and contract and put some dedicated rigs to develop Bajada del Toro.

Speaker #2: Thanks Ale for your question.

Speaker #3: Thank you.

Alejandro Demichelis: Thank you.

Speaker #1: One moment for our next question, please. It comes from Daniel Guardiola with BTG Pactual. Please proceed.

Operator: One moment for our next question, please. It comes from Daniel Guardiola with BTG Pactual. Please proceed.

Speaker #3: Hi, good morning Miguel and team, and thank you for your presentation. I have a question on the production outlook for the company. Could you provide us the expected quarterly production trajectory through 2026, including the contribution from Bajada del Toro and Mandurria Sur?

Daniel Guardiola: Hi. Good morning, Miguel and team, and thank you for your presentation. I have a question on the production outlook for the company. Could you provide us the expected quarterly production trajectory through 2026, including the contribution from Bajada del Toro and Bandurria Sur? Another question on production outlook is, I would like to know if for 2027 and 2028, where you expect significant organic growth, is there a specific Brent price threshold at which you would rather to prioritize free cash generation over production growth? If so, how should investors think about the trade-off between growth, shareholder distributions, and maintaining leverage within your target range? Thank you.

Speaker #3: And another question on production outlook: I would like to know if for 2027 and 2028 you expect significant organic growth. Is there a specific brand price threshold at which you would rather prioritize free cash flow generation over production growth?

Speaker #3: And if so, how should investors think about the trade-off between growth, shareholder distributions, and maintaining leverage within your target range? Thank you.

Speaker #2: Good question. So, starting with the first part, the consolidation of Mandurria Sur and Bajada del Toro took us to about 160,000 barrels per day. Mind you, today in July we are at 162.

Miguel Galuccio: Good question. Starting with the first part, the consolidation of Bandurria Sur and Bajada del Toro took us about 160,000 barrel per day. Month to date in July, we are at 162. We forecast Q3 at 160 and Q4 at 170. We are confident in reaching our guidance that we provide that is 158 barrel oil per day equivalent for the year. I am personally probably a bit more optimistic that we can even go a bit about these numbers. Related to your second part of the question, we make our plan at 65. That happened in November last year. As we said, you should consider that we are not going to revise any scenario number at the moment. Of course, at some point of time, we need to re-guide, we will do it. For the moment, that are the numbers.

Speaker #2: We forecast Q3 at 160 and Q4 at 170, and we are confident in reaching our guidance that we provide, which is 140.58 barrels of oil equivalent per day for the year.

Speaker #2: I am personally probably a bit more optimistic that we can even go a bit above these numbers. Related to your second part of the question, I mean, we make our plan at $65.

Speaker #2: That happened, yeah, in November last year. So I would say you should consider that we are not going to revise any of those numbers at the moment.

Speaker #2: And of course, at some point in time, we need to re-guide. We will do it. But for the moment, those are the numbers. Thank you for your question.

Miguel Galuccio: Thank you for your question.

Speaker #3: Thank you Miguel.

Daniel Guardiola: Thank you, Miguel.

Speaker #1: Thank you. Our next question is from Taso Vasconcellos with UBS. Please proceed.

Operator: Thank you. Our next question is from Tasso Vasconcellos with UBS. Please proceed.

Speaker #3: Hi Miguel. Hi, team. Thank you for taking my question. Miguel, I think I might have some kind of follow-up question on these capital allocation alternatives.

Tasso Vasconcellos: Hi, Miguel. Hi, team. Thank you for taking my question. Miguel, I think I might have some kind of follow-up question on these capital allocation alternatives. If you look at the production outlook that you have released for 2026 and 2027 and assume a Brent at something close to $70 per barrel, we view here that Vista could end 2027 close or even below one time net debt to EBITDA. You still haven't paid any dividends, but you were quite successful in doing some very accretive M&As. From now on, what's the best capital allocation alternatives that you see for Vista? Do you still view some additional M&As on the radar as an alternative here, or dividend should become a high priority for Vista? Thank you.

Speaker #3: If you look at the production outlook that you have released for 2026 and 2027, and assume Brent at something close to $70 per barrel, we will hear that Vista could end 2027 close to, or even below, one time net debt to EBITDA.

Speaker #3: You still haven't paid any dividends, but you were quite successful in doing some very, very accretive M&As. From now on, what are the best capital allocation alternatives that you see for Vista?

Speaker #3: Do you still view some additional M&As on the radar as an alternative here, or should the dividend become a higher priority for Vista? Thank you.

Speaker #2: Thank you, Taso, for your question. Yes, look, as I have always stated, growth has been and remains our priority within our capital allocation strategy.

Miguel Galuccio: Thank you, Tasso, for your question. Yes, look, as I always have stated, growth, it has been and remain our priority within our capital allocation strategy. With the additional cash that we generate, we will still keep full flexibility within the capital allocation metric that we have shown many times. That means continue seeking M&A, additional CapEx now for the rig projects that create a new opportunity for us in the future, and buyback in the short term, and potentially the final return to shareholder policy that we have discussed before. I think we are not at a stage to do it today, but it's something that we will consider in the future. Now, in the near term, the focus is to delever the company, and as we stated in this call, to close 2026, very close to our aim, that is one time net lever ratio.

Speaker #2: With the additional cash that we generate, we will still keep full flexibility within the capital allocation metric that we have shown many times. That means continuously seeking M&A.

Speaker #2: Additional capex now for the rigging projects that create a new opportunity for us in the future. And buyback in the short term, and potentially defining and retaining the shareholder policy that we have discussed before. I think we are not at the stage to do it today, but it's something that we will consider in the future.

Speaker #2: Now, in the mid-year term, the focus is to deliver the company and, as we state in this call, to close 2026 very close to our aiming, that is, one time net leverage ratio.

Speaker #2: If it's possible with the cash that we have generated, we believe that it is possible to achieve. So, our capital allocation mindset today is around all those dimensions.

Miguel Galuccio: If it's possible with the cash that we have generating, we believe that is possible to achieve. Our capital allocation mindset today is around all those dimensions.

Speaker #3: Very clear Miguel. Thank you.

Tasso Vasconcellos: Very clear, Miguel. Thank you.

Speaker #1: Thank you. Our next question comes from Leonardo Marcondes with Bank of America. Please proceed.

Operator: Thank you. Our next question comes from Leonardo Marcondes with Bank of America. Please proceed.

Speaker #3: Hi Miguel. Hi everyone. Thank you for picking my question here. So, my question is regarding the drilling and completion capex for the wells, right?

Leonardo Marcondes: Hi, Miguel. Hi, everyone. Thank you for picking my question here. My question is regarding the drilling and completion CapEx for the wells. To me, given the strong pickup in Vaca Muerta activity and the significant decline year to date in Argentina's country risk, do you see room to renegotiate lower fees with the oil services companies that are putting their rigs and equipment in Argentina. Thank you.

Speaker #3: I mean, given the strong pickup in Vaca Muerta activity and the significant decline year-to-date in Argentina's country risk, do you see room to renegotiate lower fees with the oil services companies that are putting their rigs and equipment in Argentina?

Speaker #3: Thank you.

Speaker #2: Thank you, Leonardo, for the question, and it's a good one. So, as Argentina's macroeconomic environment continues its normalization process, the price of oil services has become for me more a function of scale, volume—and I mean scale and volume, that's the same thing—and competition.

Miguel Galuccio: Thank you, Leonardo, for the question, and a good one. As Argentina macroeconomic continues its normalization process, price of oil services became, for me, more a function of scale, volume, and competition. Nevertheless, I will say Vista has demonstrated, once again, that innovation continues to play an important role in reducing the NC cost. An example of this are the latest progress that we did in cost reduction within the completion process. As an example, we moved some supply from 1,000km away to in-basin or Vaca Muerta mining supply, and lately to Bajada del Palo. But basically, tens of kilometers away from where we operate. We are engineering the completion process to move to wet sand. That also cut a lot the cost of supply sand.

Speaker #2: Nevertheless, I will say Vista has demonstrated once again that innovation continues to play an important role in reducing the NC cost. An example of this is the latest progress we made in cost reduction within the completion process.

Speaker #2: As an example, we moved some supply from 1,000 kilometers away to in-basin, or Vaca Muerta mining supply, and lately to Bajada del Palo. That basically means tens of kilometers away from where we operate.

Speaker #2: We are reengineering the completion process to move to wet sand, which also cuts a lot of the cost of supplying sand. And now we are switching our frac pump from gasoline to gas, which is also reducing costs.

Miguel Galuccio: Now we are switching from our frac pump from gasoline to gas pump, that also is reducing cost. I will say today, with the macroeconomic situation of Argentina, again, I will say competition, scale, and I will not discount innovation, particularly after what we have demonstrated. Of course, as the macroeconomic continues improving, that is all good news, and that helps definitely. Thanks for the question, Leo.

Speaker #2: So, I will say today, I mean, with the macroeconomic situation of Argentina, again, I will say competition, scale, and I will not discount innovation, particularly after what we have demonstrated.

Speaker #2: Of course, at the macroeconomic level, continued improvement is all good news, and that definitely helps. Thanks for the question, Leo.

Speaker #3: Thank you very much.

Leonardo Marcondes: Thank you very much.

Speaker #1: Thank you so much. One moment for our next question. It comes from Gellar Martins with Goldman Sachs. Please proceed.

Operator: Thank you so much. One moment for our next question. It comes from Guilherme Martins with Goldman Sachs. Please proceed.

Speaker #3: Hi Miguel. Hi team. Thank you for taking my question. I have a quick one from my side here. It's about the Vamos pipeline. Could you please explain to us or provide an update on the development of the pipeline? Also, if you could comment, do you see any risks of having to use trucking again, particularly when considering your expected ramp up in production in the second half of the year?

Guilherme Martins: Hi, Miguel. Hi, team. Thank you for taking my question. I have a quick one from my side here. It was VMOS pipeline. Could you please explain to us or provide an update on development of pipeline? Also, if you could comment, do you see any risks of having to use trucking again, particularly when considering your expected ramp-up in production in H2? Thank you.

Speaker #3: Thank you.

Speaker #2: Hi, Guillermo. Thank you for the question. The Project Contraction of Vamos is basically progressing very well. Overall, the project execution today is 65%. The pipeline is at 82%.

Miguel Galuccio: Hi, Guilherme. Thank you for the question. The project construction of VMOS is basically progressing very well. Overall, the project execution today is 65%. The pipeline is at 82%. Onshore storage, I was reported, is at 38%, and the offshore terminal at 73%. We forecast that the full project completion date will be by the middle of 2027. Having said that, I think Horacio comment, the shipment of a very specific component, like the mooring buoy, is being affected by the Strait of Hormuz closure, and the VMOS team is basically analyzing different alternatives to solve that issue. The project remain on schedule, and so far we don't expect any changes in our plan of evacuation, neither the need of adding trucking capacity. We are positive with the progress overall.

Speaker #2: Onshore storage, I was reported, is at 38, and the offshore terminal at 73. So we forecast that the full project completion date will be by the middle of 2027.

Speaker #2: Having said that, and I think Horacio commented, the shipment of very specific components like the mooring buoy is being affected by the Strait or move closure.

Speaker #2: And the Vamos team is basically analyzing different alternatives to solve that issue. But the project remains on schedule, and so far we don't expect any changes in our plan of evacuation, nor the need of adding tracking capacity.

Speaker #2: So, I mean, we are positive with the progress overall.

Speaker #3: Thank you.

Guilherme Martins: Thank you.

Speaker #2: You're welcome.

Miguel Galuccio: You're welcome.

Speaker #1: Thank you. Our next question comes from the line of Andres Cardona with C.V. Please proceed.

Operator: Thank you. Our next question comes from the line of Andrés Cardona with Citi. Please proceed.

Speaker #4: Hi, good morning all. I have a question about M&A, right? We are seeing interest from permanent players in entering Vacamorta. Would you consider any opportunity to farm in areas such as Aguilamora or Bajada del Tolo to try to maximize the value and production profile? And on the other hand, you mentioned growth remains a key pillar of the investment case, and I wonder if you see any opportunity over the short term—are you evaluating any opportunity as of now?

Andrés Cardona: Hi, good morning, all. I have a question about M&A, right? We are seeing interest from permanent players in entering Vaca Muerta. Would you consider any opportunity to farm in areas such as Águila Mora or Bajada del Toro to try to maximize the value and production profile? On the other hand, you mentioned growth remains a key pillar of the investment case, and I wonder if you see any opportunity over the short term. You are evaluating any opportunity as of now? Thank you.

Speaker #4: Thank you.

Speaker #2: Hi, Andres. Thanks for the question. So, as you know, we have not only been very successful operating Vaca Muerta assets, but we have also been very successful creating value through M&A.

Miguel Galuccio: Hi, Andrés. Thanks for the question. I will say that, as you know, we not only have been very successful operating Vaca Muerta assets, but also we have been very successful creating value through M&A. Our track record on the last few years is the acquisition of Aguada Federal, Bandurria Norte, Wiconoco, Philip and Wintershall, 2021 and 2022, La Amarga Chica last year from Petronas, and most recently Bandurria Sur en Bajada del Toro from Equinor. Needless to say that with the strategy that we have today, we are always using our full creativity to continue consolidating core acreage in Vaca Muerta shale oil asset. That continue to be our focus, and we continue looking and being very creative in anything that we can add to what we have.

Speaker #2: Our track record over the last few years includes the acquisition of Aguada Federal and Madura Norte with Wintershall in 2021 and 2022, La Marga Chica last year from Petronas, and most recently Bandurria Sur and Bajada del Toro from Equinor.

Speaker #2: So needless to say that with the strategy that we have today, we are always using our full creativity to continue consolidating core acreage in Vaca Muerta shale oil asset.

Speaker #2: That continues to be our focus, and we continue looking and being very creative in anything that we can add to what we have. With respect to our acreage position in the north, at the moment we are not looking to dilute ourselves, particularly in the current market conditions and with the strong balance sheet that we have at the moment.

Miguel Galuccio: With respect to our acreage position in the north, at the moment, we are not looking to dilute ourself, particularly in the current market condition, and with the strong balance sheet that we have at the moment. It's not something that we are thinking of today. Of course, conditions can change, and the strategy can change, and we can do something different in the future. No, at the moment, that's not the way that we look at that area. Thanks for the question.

Speaker #2: So it's not something that we are thinking of today. Of course, conditions can change and strategy can change, and we can do something different in the future, but no, at the moment that's not the way that we look at that area.

Speaker #2: Thanks for the question.

Speaker #1: Our next question comes from Michael Furow with Pickering Energy Partners. Please proceed.

Operator: Our next question comes from Michael Fierro with Pickering Energy Partners. Please proceed.

Speaker #4: Good morning, Miguel, and to the rest of the Vista team there. Given the strong start to the year, with 50 net tines already completed by the end of the quarter, the 100 to 110 annual guide appears achievable to us.

Michael Fierro: Good morning, Miguel, to the rest of the Vista team there. Given the strong start to the year with 50 net tie-ins already completed by the end of the quarter, the 100 to 110 annual guide appears achievable to us. If efficiency gains continue and provide the company with the opportunity to drill and complete more wells this year than originally planned, how would you think about the trade-off between staying within the current activity and CapEx budget versus capitalizing on these efficiency gains by adding a few more wells this year, but potentially spending a bit more than the current plan?

Speaker #4: So, if efficiency gains continue and provide the company with the opportunity to drill and complete more wells this year than originally planned, how would you think about the trade-off between staying within the current activity and capex budget versus capitalizing on these efficiency gains by adding a few more wells this year, but potentially spending a bit more than the current plan?

Speaker #2: Hi Michael. Yeah, interesting way of looking at this. So, I think we should probably look at different elements of that question. I think as the basin continues gaining scale and competition, I believe—I'm convinced, more than believe—that there is room to gain cost efficiencies in our operation and Vaca Muerta overall.

Miguel Galuccio: Hi, Michael. Yeah, interesting way of looking at this. I think we should probably look to different elements of that question. I think as the basin continue gaining scale and competition, I believe, I'm convinced more than believe, that there is room to gain cost efficiencies in our operation and Vaca Muerta overall. As you know, when we compare complete Permian, we are still having a gap in terms of cost. I believe there is less room to improve operational efficiency. For example, drilling time or number of frac stages per day. When you compare where we are today, we are very efficient, what we do so far. Therefore, there's limited upside to increase activity in the very short term with the current oil service equipment and drilling rig that we have in the country.

Speaker #2: As you know, I mean, when we compare with Permian, we still have a gap in terms of cost. But I believe there is less room to improve operational efficiency.

Speaker #2: For example, drilling time or number of frac stages per day. When you compare where we are today, I mean we are very efficient at what we do so far.

Speaker #2: So, therefore, there's limited upside to increasing activity in the very short term with the current old service equipment and drilling rig that we have in the country.

Speaker #2: Of course, if the service companies bring more equipment to the country, I think in the midterm or long term we can do better. But in the short term, I don't think the efficiency gap that we have, and particular Vista, could allow us to do really more with the same equipment.

Miguel Galuccio: Of course, if the service companies bring more equipment to the country, I think in the midterm or long term, we can do better. In the short term, I don't think the efficiency gap that we have, and particularly Vista, could allow to do really more with the same equipment. Yes, we are still having a gap for cost saving.

Speaker #2: Yes, we still have a gap for cost saving.

Speaker #4: Thank you, Miguel. Appreciate the color there. I'll turn it back.

Michael Fierro: Thank you, Miguel. Appreciate the color there. I'll turn it back.

Speaker #1: Thank you. And we have a question from Tiago Casqueiro with Morgan Stanley. Please proceed.

Operator: Thank you. We have a question from Thiago Casqueiro with Morgan Stanley. Please proceed.

Speaker #3: Hey, good morning. Thank you for taking my question. I think most of my questions were already addressed here, so Miguel, over the past few months we have seen some projects across the industry being submitted to the big framework.

Thiago Casqueiro: Hey, good morning. Thank you for taking my question. I think most of my questions were already addressed here. Miguel, over the past few months, we have seen some projects across the industry being submitted to the RIGI framework. I would like to better understand here how has been the process for Vista so far in terms of timeline. You mentioned in the first question the plan to add Bajada del Toro in the framework, should we still think of Águila Mora and Bandurria Norte as other projects most likely to be included, or has your thinking about the scope of the submission changed? Thank you.

Speaker #3: So I would like to better understand here how the process has been for Vista so far in terms of timeline. You mentioned in the first question the plan to add Bajada del Toro in the framework, but should we still think of Aguila Mora and Bandurria Norte as other projects most likely to be included, or has your thinking about the scope of the submission changed?

Speaker #3: Thank you.

Speaker #2: Hi, Tiago. Thanks. So, yes, we are currently finalizing the documentation to file the application. Really, for Bandurria Norte, this will probably take place in the coming weeks.

Miguel Galuccio: Hi, Thiago. Thanks. Yes, we are currently finalizing the documentation to file the application of RIGI for Bandurria Norte. Which will probably take place in the coming weeks. We are also working on other projects, Águila Mora, Coirón Amargo Norte, and Bajada del Toro with YPF. That should go to the Secretary of Energy. He have a team where he analyze all the information before approval. What we are seeing is that process, it will take a few months. The short question, yes, we are going to file those projects, one very soon, and then we'll have to take a few months to get the result from the Secretary of Energy. Yes, we are very happy what the government did in terms of the RIGI, and that clearly have helped us to push forward some of the projects that we have in our plan.

Speaker #2: We are also working on another project: Aguilamora, Corinona, Margo Norte, and Bajada del Toro with YPF. Now, that should go to the Secretary of Energy. He has a team where he analyzes all the information before approval.

Speaker #2: And what we are seeing is that process will take a few months. So, the short answer is yes, we are going to file those projects very soon, and then we'll have to wait a few months to get the result from the Secretary of Energy.

Speaker #2: But yes, I mean, we are very happy with what the government did in terms of that, really, and that clearly has helped us to push forward some of the projects that we have in our plan.

Speaker #3: Very clear. Thank you.

Thiago Casqueiro: Very clear. Thank you.

Speaker #1: Thank you. One moment. Our next question is from Vicente Falanga with Bradesco BBI. Please proceed.

Operator: Thank you. One moment for our next question. It's from Vicente Falanga with Bradesco BBI. Please proceed.

Speaker #5: Hi, Miguel Alejandro. All of Vista's team, thank you for taking my question. We noticed that Bajada del Palo Este's production dropped from March to May.

Vicente Falanga: Hi, Miguel, Alejandro, all of Vista's team. Thank you for taking my question. We noticed that Bajada del Palo Este's production dropped from March to May. Wanted to know if there's anything particular going on there or just a cyclical process of tying up wells. If you could share with us what was your exit output for Bajada del Palo Este in the quarter. Thank you very much.

Speaker #5: I wanted to know if there's anything particular going on there, or if it's just a cyclical process of tying up wells. And if you could share with us what was your exit output for Bajada del Palo Este in the quarter.

Speaker #5: Thank you very much.

Speaker #2: Hi Vicente. Thanks for the question. So let me probably put your question in context. Let's look at the big picture of development. The rationale of our development plan and activity is based on many elements.

Miguel Galuccio: Hi, Vicente. Thanks for the question. Let me probably put your question in context or look at the big picture of development. The rationale of our development plan and activity is based in many elements. One is, of course, production. The other is delineation and de-risking of the future areas where we are looking for development or to drill, facility capacities, minimizing frac hit. There are many things that we look at, and all those elements we look at within the full core development hub, which include Bajada del Palo Este, Aguada Federal, and Coirón Amargo Norte. There's nothing specific that is going on today in Bajada del Palo Este. The overall production in the operative core development hub grew 10% from Q1 to Q2. Basically, when, if I remember properly, from 93,000, I think, to north of 90,000 barrel of oil per day equivalent.

Speaker #2: One is, of course, production; the other is delineation, and the risking of the future areas where we are looking for development or to drill.

Speaker #2: Facility capacities, minimizing frac kit—so there are many things that we look at, and all those elements we look at within the full core development hub.

Speaker #2: Which include Bajada del Palo Este, Bajada del Palo Oeste, Agua Federal, and Corinona Margo Norte. So, there's nothing specific that is going on today in Bajada del Palo Este, and the overall production in the operative core development hub grew 10% from Q1 to Q2. Basically, if I remember properly, from 83,000, I think, to north of 90,000 barrels of oil per day equivalent.

Speaker #2: So then, of course, if you look at it field by field, you can see changes, or you can see a field dropping and another field coming up.

Miguel Galuccio: Of course, if you look at field by field, that you can see changes or you can see a field dropping, another field coming up. The rationale is not based on those field names. We take the full development hub, the full core development hub as one, and we allocate capital activity based on the elements that I said before.

Speaker #2: But the rationale is not based on those field names. We take the full development hub—the full core development hub—as one, and we allocate capital activity based on the elements that I said before.

Speaker #5: Great. Thank you very much, and good luck on Sunday.

Vicente Falanga: Great. Thank you very much. Good luck on Sunday.

Speaker #2: Thank you very much.

Miguel Galuccio: Thank you very much.

Speaker #1: Thank you. This will conclude our Q&A session, and I will turn the call back to Miguel Galuccio for closing comments.

Operator: Thank you. This will conclude our Q&A session, and I will turn the call back to Miguel Galuccio for closing comments.

Speaker #2: Well, very strong quarter, guys. Thank you very much for the support. Once again, thank you to all of Vista's employees, coworkers, and friends that have helped us come to the point that we are today.

Miguel Galuccio: Well, very strong quarter, guys. Thank you very much for the support. Once again, thank you to all the Vista employees, coworkers, friends that have make us to come to the point that we are today, a very strong company. We're looking forward to continue performing and delivering. Thank you very much. Have a good day.

Speaker #2: We are a very strong company, and we look forward to continuing to perform and deliver. Thank you very much, and have a good day.

Operator: This concludes our conference. Thank you for participating. You may now disconnect.