Vista Energy SAB de CV Q3 FY2026 earnings call

• Production Growth: Delivered record quarterly production driven by organic growth, well connectivity, and full consolidation of Bandurria Sur and Bajo del Toro assets.
• Operational Efficiency: Connected 25 new wells in Q3, maintaining a run rate of 100 wells per year. Cumulative tie-ins over the last 12 months total 90 wells.
• Cost Management: Lifting costs were $4.7/BOE, a 6% year-over-year increase due to inflation and FX effects. Selling expenses decreased 14% year-over-year due to dilution from increased volumes.
• Financial Strength: Net leverage ratio improved to 1.12x Adjusted EBITDA (pro forma 1.04x), reflecting a solid balance sheet and significant debt repayment.
• Cash Position: CASCO position grew to $775 million. Share buybacks of $55 million were executed in Q3, with $95 million remaining under the approved $150 million annual plan.

Total revenues reached $1.23 billion, representing a 75% year-over-year increase and a 7% sequential increase. Adjusted EBITDA was $841 million, up 78% annually and 4% sequentially, with an adjusted EBITDA margin of 68%. Net income stood at $293 million, significantly higher than the $27 million recorded in Q3 2025 (excluding non-recurring gains from the Petronas acquisition). Free cash flow was strong at $334 million for the quarter, with year-to-date free cash flow (excluding M&A payments) at $563 million. Total production averaged 169,000 BOE/day, a 33% year-over-year increase, driven by oil production of 147,000 barrels/day (up 34%) and gas production growth of 29%.

• Production: Reiterated guidance for 185,000 BOE/day for 2027. Updated Q4 2026 production outlook upward, suggesting it could reach approximately 175,000 BOE/day, supporting the full-year 2026 guidance of 158,000 BOE/day.
• Financials: Maintained Adjusted EBITDA guidance of $3.3 billion for 2027, assuming Brent prices of $80/barrel.
• Capital Expenditure & Activity: May add one drilling rig in 2027, potentially pushing well count slightly above the 100-110 range. Accelerated CapEx for the Bandurria Norte project from 2029 to 2027 pending regulatory approval.

• Infrastructure Bottlenecks: Pipeline capacity is currently sufficient with 36,000 BOE/day spare capacity, but future growth depends on the timely completion of BEMOS pipeline projects scheduled for commercial operation in H1 2027.
• Regulatory Risks: Progress on accelerating the Bandurria Norte project is contingent upon receiving necessary regulatory approvals/re-applications.
• Market Volatility: Sensitivity analysis indicates that a $1 change in Brent or differential prices results in a $45-$50 million impact on Adjusted EBITDA, highlighting exposure to oil price fluctuations.
• Inflationary Pressures: Lifting costs have risen due to inflation affecting peso-denominated goods and services, alongside foreign exchange rate effects.

Q: Analyst asked if production risks exceeding pipeline capacity given September levels of 152k bpd against a 162k reference.

A: CEO clarified current capacity is 180k bpd with 36k bpd spare, including unpublicized drag reduction agent benefits. New BEMOS pipeline adds 80k bpd starting Q1 2027, ensuring no bottlenecks for near-term growth plans.

Q: Analyst queried potential for further M&A given comfortable leverage ratios.

A: CFO stated leverage will hit 1.0x by year-end, providing flexibility for opportunistic deals. Company remains disciplined, focusing only on core Vaca Muerta acreage, though not actively in any process currently.

Q: Analyst inquired about testing different landing zones and potential production upside.

A: COO explained progressive development prioritizing deeper, richer organic zones first. Untested zones in Bajal Pablo Este and Aguila Mora offer inventory upside, similar to neighboring blocks like Bajo del Toro which have denser well inventories.

Q: Analyst asked about 2027 guidance considering oil prices and CAPEX plans.

A: CEO maintained 185k bpd production and $3.3B Adjusted EBITDA guidance for 2027. Noted potential addition of one drilling rig and acceleration of Bandurria Norte CapEx to 2027 if approved.

Q: Analyst sought clarity on long-term capital allocation strategy beyond immediate needs.

A: IR Officer outlined continued share buybacks ($95M pending this year) and building cash reserves. Future allocations may include larger buybacks, accelerated CapEx for Rigy/Bandurria Norte, or further shareholder returns as cash flows remain strong.