Vista Energy, S.A.B. de C.V. Q2 FY2025 earnings call

Key Points

• Completed acquisition of 50% stake in La Amarga Chica, making Vista the largest independent oil producer and exporter in Argentina.
• Total production increased significantly, with 24 new wells connected in Q2.
• Reduced new well costs by 10% to $12.8 million per well through innovation, contract strategy changes, and renegotiations.
• Eliminated oil trucking, saving $41 million compared to Q4 2024, improving margins.
• Adjusted EBITDA margin increased 4 percentage points sequentially.

Total production was 118,000 boes per day, an 81% year-over-year increase. Oil production was 102,000 barrels per day, 79% year-over-year. Total revenues were $611 million, 54% higher than the same quarter last year. Adjusted EBITDA was $405 million, a 40% interannual increase. Net income was $235 million, including $102 million from one-offs related to the Petronas Argentina acquisition. Free cash flow outflow was $1.4 billion, mostly from the upfront cash payment of the Petronas Argentina acquisition. Net leverage ratio at quarter end was 1.38x pro forma.

2025 Forecasts

• Production: 112,000-114,000 boes per day for the year, with second semester 125,000-128,000 boes per day.
• Adjusted EBITDA: $1.5 billion-$1.6 billion for the year, with second semester $825 million-$925 million.
• CapEx: Forecast at $1.2 billion for 2025, reflecting savings in facilities.
• Growth: Projected 16% more production and 70% more adjusted EBITDA in 2025 vs 2024 at $65 Brent.

• Oil price volatility could impact financial performance.
• Operational challenges related to integrating acquisitions and managing working capital.
• Regulatory and geopolitical risks in Argentina affecting export and production activities.

Q: About La Amarga Chica well costs and EURs compared to BPO.

A: Geologically continuous with same rock quality, performance comparable, working with YPF to improve synergies.

Q: On free cash flow deterioration and future.

A: Partly due to Petronas acquisition and working capital, but second semester forecast neutral free cash flow.

Q: Maximum production by end of next year.

A: Up to 200,000 bbls per day including Vaca Muerta Sur capacity.

Q: Margin improvement and VMOS pipeline.

A: VMOS pipeline progress with financing closed, first stage ready mid-2027.

Q: M&A appetite.

A: Always seeking strategic fit and value accretion opportunities.

Q: Flexibility with local pricing.

A: No immediate plan to shift from export focus, but would serve local market if parity reverses.

Q: Tax burden and cash buildup.

A: Pending tax payments of ~$200M-$300M included in free cash flow guidance.

Q: Hedging flexibility.

A: Limited due to Argentina's capital controls, financial hedging not feasible.

Q: Maintenance CapEx with La Amarga Chica.

A: Need ~50 wells net to keep production flat, ~$700M-$750M CapEx