Vista's 3rd Quarter 2026 Earnings Webcast - VISTA ENERGY SAB DE CV

Hello, and thank you for standing by. Welcome to VISTA's third quarter 2026 earnings call. 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. To withdraw your question, please press star one-one again. Please be advised that today's conference is being recorded. Now it's my pleasure to turn the call to Vista's Strategic Planning and IRO, Alejandro Chernakoff. Please proceed. Thanks. Good morning, everyone. We are happy to welcome you to Vistas' third quarter of 2026 results conference calls. I am here with Miguel Galucho, Vistas' Chairman and CEO, Pablo Verapinto, Vista CFO, Juan Garobi, Vistast's CTO, and Matias Weisel, Vestas' 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-thinking 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, AFRS. However, during this conference call, we may discuss certain non-IFRS financial measures such as adjusted EBITDA and adjusted net income. 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. Results shown in this presentation are adjusted to exclude a 16.3% percent non-controlling interest in Bandurria Sur participaciones SA, holder of 30 percent non-operated working interest in bandurria sur block of which 25.1 percent is finally attributable to Vista. 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 bist in the new york stock exchange i will now turn the call over to miguel thanks ale good morning and welcome to this earning call the third quarter of 2026 was marked by the robust operational and financial performance organic production grow and the full consolidation of a keynote asset led to a record quarterly production. Combined with strong oil realization prices and focus on cost efficiency, this led to a solid adjusted EBDA and free cash flow generation during the quarter. Total production was 169,000 MBOEs per day, 33 percent above previous year. Oil production was 147,000 barrels per day up 34 percent vis-a-vis the previous year Total revenues during the quarter were $1.23 billion, an outstanding growth of 75 percent compared with Q3 2025. Lifting costs was $4.7 per BOE, 6% above the previous year. Capital expenditure was $461 million sequentially flat. Adjusted VDA was $841 million, an interannual increase of 78%. Net income was $293 million, significantly above Q3 of 2025, which was $27 million after excluding the non-recurring gains of $288 million corresponding to the Petronas acquisition. Earning per share were $2.6 during the quarter. Cash flow was $334 million, mostly as a consequence of the significant boost in adjusted VDA generation. Finally, our net leverage ratio at quarter end was 1.12 times adjusted VBA on a performance basis reflecting LTN figures for the acquired asset. The ratio was 1,04 times adjusted the VDA, marking a significant reduction year over year and reflecting a very solid balance sheet. Total production during Q3 averaged 169,000 BOEs per day, reflecting an interannual increase of 33 percent and sequential increase of 8 percent. We connected 25 new wells during the quarter, currently running operation at the run rate of 100 wells per year. The cumulative 90 new wells tied in during the last 12 months provide a substantial drive to production growth in the period. The consolidation of our working interest in Bandurria Sur and Bajo del Toro also drove growth. As the consolidation was as of May 1st, we have three months of production from this asset in the third quarter compared to two months in the previous quarter. Quarterly oil production averaged 147.1 thousand barrels per day, 34 percent higher year over year, and 9 percent above the previous quarter. Gas production increased 29 percent on an interannual basis and 8 percent sequentially. Total revenues during Q3 were $1.23 billion, a material growth of 75 percent compared to the previous year, driven by a solid increase in oil and gas production and higher oil prices. On a sequential basis, revenue increased by 7 percent, driven by higher production, which upset lower oil realization prices. Oil exports increased 56 percent year-over-year, reaching 9.9 million barrels in the quarter, representing 73 percent of our oil sales volume. During the quarter exports reached $935 million. Realized oil prices were $84.2 per barrel, 30 percent above Q3 2025, and 6 percent below the previous quarter. The sequential decrease is mainly explained by the decrease in Brent from $97 to $91 per barrel. We sold 100% of our volumes at export parity prices, both domestically and internationally. In Q3, lifting cost was $4.7 per BOE, an increase of 6% compared to the previous year. This reflects the impact of inflation on pesos-dominating goods and services amid flood effect rates. Selling expenses were $3.6 per year, a 14 percent decrease year-over-year, mainly driven by the dilution of a ship-or-pay cost on a per-barrel basis in the duplicated pipeline, as we continue to ramp up production volumes. During Q3, adjusted EVDA was $841 million, 78% higher interannually, driven by a strong expansion of revenues amid flat unit costs. On a sequential basis, adjusted EBDA increased 4% as production growth offset lower realized oil prices. Adjusted EBITDA margin was 68%, an expansion of 1% point compared to the same quarter of last year. Similarly, net back increased 34% year-over-year to $54.1 per BOE. In Q3 2026, cash flow from operating activities was $773 million, maintaining working capital flat amid the larger operation and including income tax payment for $50 million. Cash flow used in investing activities was $439 million, driven by accrued capex of $460 million and a decrease in capex-related working capital of $20 million. Free cash flow was very strong at $334 million during the quarter. Year-to-date free cash flow excluding M&A payment was $563 million. Cash flow from financing activities was negative $164 million, reflecting net capital debt repayment of $60 million, share buyback of $55 million, and interest payment of $24 million. Our CASCO position continues to grow, standing at $775 million at the end of Q3. Finally, our net leverage ratio stood at 1.12 times adjusted EBITDA, a strong reduction from 1.41 times in the previous quarter. On a pro forma basis, considering the last 12 months of adjusted EBITDA for the acquired asset, net leverage was 1.04 times at quarter end, improving from 1.25 times in previous quarter To conclude this call and before we move to Q&A, I will make some closing remarks. During Q3 we delivered robust production growth on the back of strong execution and solid productivity of new wells and also the full quarter consolidation of Bandurria Sur and Bajo del Toro. Production growth in combination with the high oil prices and flat unit costs led to a strong adjusted EVDA and free cash flow generation. This allows us to strengthen our cash position and continue reducing our net leverage ratio. Finally, we made very good progress on our annual work program and are well on track to deliver our 2026 items. Before we move to Q&A, I would like to thank all Vista employees for their outstanding work during the quarter and also our investors for their continuous support. Operator, we can now move to a Q&A. Thank you so much. And as a reminder to ask a question, simply press star 11 on your telephone and wait for your name to be announced. To withdraw your question, press star 1 1 again. Our first question comes from the line of Milene Carvalho with JP Morgan. Please proceed. Good morning, everyone. Congrats on the results, and thank you very much for the opportunity to make my question here. So, Vista has delivered solid production growth in 2026, and we saw the company delivering 152,000 barrels per day in September. So given that we have been using a reference of pipeline capacity of 162,000 barrels per day, I started to receive a few questions from our clients. Is there a risk that VISTA production will exceed the available pipeline capacity? And if you could also touch on how is the latest status on the progress of VAMOS project? There could be a delay, and what would be the implications for VISTA here? Thank you very much. Hi, Milene, thank you for your question, and yes, as you mentioned, in September, our production was 152,000 barrels per day. Our current pylon capacity is at 180,000 barrel per day, and let me give you a bit of detail on that. So, at this point, we have 36,000, or 20% of the spare capacity available to us. The breakdown is as follows, 78,000 barrels per day correspond to Old Elbal, 72 to Duplicar, and 32 to Vaca Muerta Norte. This pylon capacity includes 33,000 of drug reduction agents, which at the moment what we have made public in our materials is only 9,000 that. we feel at this time comfortable our confidence that really we can add another 24 000 due to drug reduction agency um related to duplicar we also have fine-tuned uh what is duplicate or develop open access after the keynote acquisition with that we have at around 2 000 barrels per day capacity to what we have mentioned before and to last point on vemos well demos mechanical completion is scheduled for the end of the year so we will start to fill in the pipeline in q1 and you can expect that we have commercial operation scheduled for the first semester initially we have 80 000 byline capacity and we will not get the full amount during the second the first semesters so you had you have to expect the 50 000 really will come in the single semester so in short we don't see any bottleneck for our growth plan at the moment Thank you for the question, Milene. Perfect. Thank you very much. Thank you. Our next question is from Leonardo Marcondes with Bank of America. Please proceed. Hello, everyone. Thank you picking my questions. Everyone, actually, with leverage now at very comfortable levels, I mean, do you still see room for further M&A in Argentina? thank you very much thank you Leo for your question I mean taking advantage that I'm short of voice and we have the full team connected I will pass this question to Pablo Verapinto thank you Miguel and Leo thank you for your question we expect our net leverage ratio to continue coming down it should reach one time by the end of the year and that will give us flexibility to be prepared to take advantage of opportunistic M&A deals that may come up. We think we're in a very good spot if any opportunities arise. And as you know, we are very focused on the core acreage in the oil window of Vaca Muerta. So far, and we expect that to continue being the case, we have been very disciplined and only focused on that window of the basin. At this point, we We are not actively involved in any process, but obviously we remain alert. We always look forward to deals that could generate incremental value as the ones that we have completed in the past. That's perfect. Thank you, guys. Thank you. Our next question comes from Bruno Montanari with Morgan Stanley. Please proceed. Good morning. Thanks for taking my question. I have one on my side. I remember the company discussing the possibility of testing different landing zones within the core acreage. So I was wondering how have those tests evolved and how we should think about the potential production upside from that initiative. Thank you very much. Thank you, Bruno. Very good question. I will pass this one to Matias Weisel, the CEO of Vista. Yes, I take it. Miguel, thank you, Bruno, for your question. It's a good one. You know we have some landing zones that remain untested. as shown in our public disclosure. So just to give you some color in Baja el Palo Oeste, we haven't tested the upper carbonates yet. If you consider neighboring blocks like Bandurria Sur and La Marga Chica, they are currently developing more landing zones and that makes sense because these are all the blocks in full field development for longer time than Baja El Palo Este. Adding some color, in Bajal El Pal Oeste we are also studying the organico that we know is present at least in the western part of the block, close to Ajalpalo Oeste. Adding to that, in Aguila Mora, in 2023, we piloted one pad. We only tested two landing zones, but we know that there are present four landing zones in that area. If you see the neighborhood areas and activity, for example, Bajo del Choique and Bajo el Toro. To give you some sense of potential of this asset here, in Bajo el Tor, at our working interest, we have 146 wells in the inventory with 14,000 acreage. And in Aguila Mora, we'll have 21,000 acres, but only with 100 wells in inventory. So we're looking forward to that. Overall, the way that we develop our assets is progressive as Shell plays. So, if you're in Korea, like we are, you have many landing zones, the best way to develop these targets is to prioritize the richer organic content, which is typically the deepest zones. So, that's the reason why we started moving upwards, and typically you would expect upsides being reflected in the whole inventory as you continue drilling and testing. So, I am quite confident that you will see more wells added to inventory in the next years for the company. Got it. Thank you very much. Thank you. Our next question comes from Alejandro Demichalis with Jefferies. Please proceed. Yes, good morning. Thank your for taking my question. The question is, how are you looking at 2027 given where oil prices are, given that you have the really kind of projects that have been submitting, and also how you're thinking about CAPEX for next year, please. Thank you, Ale, for your question. For now, we maintain our 2027 guidance. Production was strong in September, very strong, but we expect to be flattened in October and November. Of course, this is a very good starting point for 2027, so we are reinforcing our 185,000 bar oil per day production guidance at this time. Regarding adjusted EVDA, assuming brand of 80, we reiterate our guidance of $3.3 billion for next year. As a sensitivity, you guys have modeled this many times, a change of $1 in price, either brand or differential, lead to a delta of $45 to $50 million of adjusted EVBA. Regarding capex and activity, we might add a drilling rig to our operation next year, this will push us toward the higher end of our activity guidance which was between 100 and 110 new wells we may be even slightly about additional activity will be mostly related to anduria norte assuming the reapplication get approved we will bring the project forward from 2029 to next year And I plan to give you a full update on these topics in Q4 earnings in February. That's very clear. Thank you. Thank you, our next question comes from the line of Tasso Vasconcelos with UBS, please proceed. Hi, Miguel, Pablo, rest of the team. I think it's some kind of follow-up on the discussions that we already had here. The company is presenting a very strong cash flow, not only this year, but in the past years. I would say that this year specifically, it's quite above the initial expectations given the current oil environment. And when you look at the leverage, and Pablo mentioned a little bit on this as well, it is already in a very comfortable level. We discussed M&A, if they appear, of course. the previous cash flow in the discussion a little bit, the CapEx for next year. But thinking maybe one, two or three years ahead, Miguel, can you fully allocate this extraordinary cash flow that you are seeing in more CapEx? What are the main alternatives that we have on the table looking again one, deux, three years. Two years ahead. Thank you. Thank you, Tasso. Very good question. And I will probably answer looking two years ahead So the strategy is the same as we explained during the last investor day in November 2025. Part of the free cash flow is allocated to share by back. We have an approved plan of $150 million this year, of which we have already executed 55. So we have pending $95 million. We expect free cash flows to be positive in Q4, so we will continue building up our... please stand by we are experiencing some audio difficulties from the line of miguel i'll continue with the with the answer carmen uh hi taso this is alejandro how are you all uh so as probably as miguel was saying uh we just uh this year where we had 150 million dollar approved plan, where 55 million were already executed during Q3. We still have $95 million pending for the year. And as you know, we continue to grow production in Q4. Prices are still strong. So you could expect a Q4 where free cash flow continues to be positive. That means that we continue building cash until year end. So we should be thinking that following next year, back to Miguel's answer to the previous question, you are going to be able to increase some of the capex linked to the RIGI project of Banduria Norte that we're bringing forward from 2029 until now. And we might have additional cash flow on the cash that we build this year to probably continue next year with a larger buyback than the one that we actually have this year so we should expect a larger buy back this year coming from a strong cash flow generated in 26 and when you think of 27 and 28 as we disclose on the previous plan part of it we could do some acceleration of capex linked to rigi but also we could continue the leveraging and adding additional buybacks or some kind of return to shareholders we need to continue thinking how that will go on i'm not going to repeat on m&a i think pablo covered that part uh so so with that one tasso probably i will pause and let me know if that covered the answer it does very clear thank you ali thank you so much one moment for our last question and it comes from daniel guardiola with btg back 12. please proceed hi thank you Thank you. Good morning, everyone. I have a question on your production outlook. I would like to know if you could provide perhaps more color on your anticipated quarterly production ramp-up through 2027, and what are the key operational milestones underpinning this growth trajectory, particularly in terms of drilling activity, well completions, and infrastructure availability? availability and in the same sense I like to know is if you could provide with us how much flexibility do you have to accelerate or to eventually moderate this production growth depending on oil prices and market conditions thanks Daniel but we were disconnected so production in q3 was was 159 thousand per day driven by VPO, VPE, Bandurria Sur and Bajo del Toro with very strong September. I would say considering the production level, we are improving our soft guidance from Q4. In the last call I said that we will be probably more than 170,000 barrels of oil per day and I think you can take note that this 170 could be about 175, okay? So we are very well positioned to deliver what we said we will deliver. This implies that we will expect to meet the guidance of 158 BOE per day for 2026. It also means that we are in a very good position to deliver 185,000 BOE guidance for 2027. And for 2028, we expect a similar quarterly dynamic, similar profile that you have seen this year in terms of pad coming in and production coming in into 2026. I think we covered the infrastructure part with Milene. We will give a full detail. This is not the bottleneck for us. Also we mentioned that we may add one drilling rig next year based on the riggy approval. So this is pretty much what I can tell you right now, Daniel. Thank you again You're very welcome Thank you, and this will conclude our Q&A session and I will turn it back to you Miguel for final comments Well, thank you guys for the continued support it has been a super quarter congratulations to all the employees of Vista at the operation in New Kent that have done an outstanding job really bringing this grow so thank you very much again and have a very good day everybody thank you and this will conclude our conference thank you for participating and you may now disconnect