• Total Production: 72.8 Mboe per day, a 47% increase year over year and 12% quarter over quarter.
• Oil Production: 63.5 Mbbl per day, 53% above the same quarter last year and 11% up compared to the previous quarter.
• Total Revenues: $462 million, a 53% increase year over year.
• Lifting Cost: $4.7 per Boe, 2% down year over year.
• Capital Expenditure: $369 million, driven by 12 new wells drilled and 15 wells completed.
• Adjusted EBITDA: $310 million, a 37% increase year over year.
• Adjusted Net Income: $53 million, with an adjusted EPS of $0.6 per share.
• Free Cash Flow: $74 million negative, due to higher cash in investing activities.
• Net Leverage Ratio: 0.65 times Adjusted EBITDA at quarter end.
• Realized Oil Prices: $68.4 per barrel on average, 1% up annually.
• Export Oil Sales: 43.5 million barrels, 57% above the previous year.
• Adjusted EBITDA Margin: 65% during the quarter.
• Cash at End of Quarter: $256 million.

• Warning! GuruFocus has detected 5 Warning Sign with DAR.

Release Date: October 24, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Vista Energy SAB de CV (NYSE:VIST) reported a strong operational and financial performance in Q3 2024, with total production reaching 72.8 Mboe per day, marking a 47% increase year over year.
• Oil production increased by 53% compared to the same quarter last year, reaching 63.5 Mbbl per day.
• Total revenues for the quarter were $462 million, a 53% increase year over year, driven by strong production growth.
• Adjusted EBITDA was $310 million, reflecting a 37% increase year over year, supported by robust revenue growth and lower lifting costs.
• The company has secured additional capacity for future growth, including a third rig and a second frac set, which provides flexibility for further expansion in 2025.

Negative Points

• Free cash flow was negative $74 million during the quarter, primarily due to higher cash used in investing activities as capital expenditures ramped up.
• Lifting costs per BOE increased by 5% sequentially, driven by higher costs in gathering, processing, gas compression, and power generation.
• The company is withdrawing its 2026 guidance, indicating uncertainty in long-term planning.
• Despite strong operational performance, the adjusted net income was relatively modest at $53 million, implying an adjusted EPS of $0.6 per share.
• The company faces challenges in managing oil price volatility, as current regulations do not allow for a hedging strategy.

Q & A Highlights

Q: Vista had a similar level of well drillings in completions in the third quarter versus the second quarter of 2024, but we saw a sharp rise in the capex. Are you drilling longer laterals with more frac stages? If so, what is the expected peak production for these wells compared to previous ones? A: Yes, the increase in capex is due to drilling longer laterals, around 3,200 meters compared to 2,800 meters previously. This results in higher costs, mainly from the increased number of completion stages. The expected ultimate recovery (EUR) for these wells is about 1.8 million barrels, compared to 1.5 million barrels for shorter laterals. This strategy is driven by subsurface conditions and improves net present value (NPV) and payoffs.

Q: What is the full potential for well delivery in the future, and what are the main bottlenecks and risks for an accelerated development plan? A: In 2024, we will tie in 50 to 54 wells using three drilling rigs and one frac set. For 2025, we plan 52 to 60 wells with the same rig count but a full frac set for the entire year. The main bottleneck is frac capacity, which we have secured, providing flexibility and potential for further growth if needed.

Q: How should we expect your production to evolve quarterly into 2025, given your secured evacuation capacity of 124,000 barrels per day? A: We will finish 2024 with an average of 85,000 barrels per day in Q4 and are guiding for 95,000 to 100,000 barrels per day in 2025. We have evacuation capacity for 124,000 barrels per day, composed of pipeline and trucking capacities. We expect to have spare capacity, especially in trucking, and do not anticipate using the full 30,000 barrels per day trucking capacity.

Q: With recent oil price volatility, is the company considering implementing a hedging strategy for real oil prices if regulation allows it? A: Currently, regulation does not allow us to hedge due to restrictions on accessing dollars for hedging. We consider ourselves a low-cost operator with low leverage, and we believe our investors can hedge more efficiently. We do not have a hedging program planned, but if conditions change, we may consider it.

Q: Can you provide an update on the sale process of Exxon's assets in Argentina? Are you still in the race, and what are the main merits of these assets? A: We remain engaged in the competitive process for Exxon's assets. These assets are attractive as they could allow us to create a new development hub in the North, adding materiality to our current operations. However, we will only proceed if it makes business sense, as we already have significant acreage and well locations for future development.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.