Vista Energy S.A.B. de C.V.

Good day and thank you for standing by. Welcome to VISTA First Quarter 2025 Earnings Webcast. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1-1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 1-1 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Alejandro Chernakov, VISTA Strategic Planning and Investor Relations Officer. Please go ahead.

Thanks. Good morning, everyone. We are happy to welcome you to VISTA's first quarter of 2025 results conference call. I am here with Miguel Gallucho, VISTA's chairman and CEO, Pablo Verapinto, VISTA's CFO, Juan Garobi, VISTA's CTO, and Matias Waisel, 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 expectations contemplated by these remarks. Our financial figures are stated in U.S. dollars and in accordance with International Financial Reporting Standards . However, during this conference call, we may discuss certain non-IFRS financial measures, such as adjusted EBITDA. Reconciliation of these measures to the closest IFRS measure can be found in the earnings release that we issued yesterday, so please check our website for further information. It's 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, everyone, and welcome to the turn-in call. As you know, last week we announced the acquisition of Petronas Argentinas. I am personally thrilled by the consolidation of 50% of La Marga Chica, a low-cost high-retain asset, which is transformational for Vista, providing us with a significant large scale. The acquisition brings material flow in production and substantial EBITDA generation, which will strengthen our cash flow profile going forward. Today, I will first go through the quarterly results. Then, into the details of the acquisition and its merit, and the last, I will do a Q&A session. During the first quarter of 2025, we continue to deliver robust growth year over year. We also recorded a major mass toll with the inauguration of Old Delval duplicated pie land, reducing significantly our selling expenses as we scaled down the use of truck to zero by the end of the third quarter. In Q1 2025, production was 80.9 thousand VOEs per day, an increase of 47% year-over-year. Oil production was 69.6 thousand barrels per day, also 47% year-over-year. Total revenues during the quarter were $438 million, 38% above the same quarter of last year. Lifting cost was $4.7 per VOE, 8% above year-over-year. Capital expenditure was $268 million, driven by 16 wealth drills and 10 wealth completed during the quarter, plus $49 million in development facilities. Adjusted EBITDA was $275 million, an interannual increase of 25%. Net income was $83 million, implying a quarterly EPS of $0.9 per share. Free cash flow was minus $243 million during the quarter as we initiated a year of a very strong growth. And finally, net leverage ratio at quarter end remained strong at 0.84 times adjusted EBITDA. During Q1, we recorded another quarter of double digit inter-annual production growth. This reflects a strong performance from our development with 49 wells connected in the last 12 months. We tied in 10 wells in the quarter, back-loading activity to make better use of all the bi-line expansion and minimize tracking expenses. Total production at 80.9 thousand VOs per day was 47 percent above the same quarter of last year and, as expected, 5 percent below Q4 2024. Oil production was 69.6 thousand barrels of oil per day, 47% above year-over-year. And gas production increased 42% on interannual basis. In Q1 2025, total revenue were $438 million, 38% higher year-over-year, driven by the strong increase in oil production. On sequential basis, the relatively lower increase in total revenues compared to the 47% increase in oil production reflect an inventory buildup of 360,000 barrels of oil, which will be reflected in the sales of Q2. Realized oil price was $68.6 per barrel on average, down 2% on an interannual basis, mainly driven by the lower international prices. Export realization prices were $68 per barrel, We exported 3.2 million barrels of oil during the quarter, twice as much as during the same quarter of 2024. Domestic realization prices were $69.4 per barrel, including volume sold at export parity. We continue to increase the domestic volume sold at export parity pricing. During Q1, 78% of our domestic volume and 90% of our total volumes were sold at export parity. Lifting costs during Q1 was $4.7 per VOE, flat on sequential basis, reflecting successful cost control despite the lower volumes and the underlying USD cost inflation. Selling expenses per VOE came down 19% on sequential basis, driven by saving in track costs with total $27.7 million, $13.7 million below Q4 2024. The connection of all the LVAL duplicated pipeline during the quarter enabled us to gradually reduce tracking volumes. Importantly, expansion capacity is now fully available. We have incorporated 31.5 thousand barrels of oil per day of pipeline capacity, and we forecast no tracking in future. Alonso Pizarro- I just did a video in the quarter was $275 million 25% higher on an internal basis and flat compared with you for 2024 I just did a margin expanded five points center point on a sequential basis, driven by higher prices and lower selling expenses. Alonso Pizarro- Driven by the same factors, our net back expanded 9% during the quarter to $37.8 per year. During Q1 2025, cash flow from operating activities was $66 million, reflecting an increase in working capital of $59 million, and an back payment for metering expansion of $36 million. Cash flow used in investing activities was $310 million, Reflecting a crude cadapec of $268 million, an increase of $18 million in working capital, and an investment in Vaca Muerta Sur of $29 million. Free cash flow during the quarter was therefore minus $243 million. Cash flow from financing activities was $219 million, reflecting proceeds from borrowing of $341 million, and partially offset by the repayment of borrowings of $99 million. Finally, cash at period end was $740 million, and our net leverage ratio stood at 0.84 times adjusted EBITDA. We will now deep dive into the acquisition of Petronas Argentina, which we announced last week. The purchase price was composed of $900 million in cash, a deferred cash payment of $300 million at zero interest, and 7.3 million Vista shares. This payment equates to an NPD of approximately $1.3 billion, leading to a highly accretive acquisition multiples. With this transaction, we closed last week. We started the consolidation of 50% of La Marga Chica as April 15, a material addition to our portfolio. La Marga Chica spans 46,000 acres in the core of Baja Muerta and is right next to Bajada del Palo Oeste and Aguada Federal. At our share, we estimate it has an inventory of 200 wells to be drilled, increasing and enhancing VISTA's inventory. At our 50%, P1 reserves were 140 million BOEs, as filed at PRN 2023, a significant addition to the 375 million BOEs of P1 reserves booked by VISTA. With the 247 wells on production at ERN 2024, La Amarga Chica has a solid history of robust well productivity and low lifting costs, very comparable to our development hub. It is also the second largest producing block in Vaca Muerta, Production was 79.5 thousand VOEs per day in Q4 2024, implying that our 50% we have consolidated 39.8 thousand VOEs per day. This leads to a pro forma production of 125 thousand VOEs per day for such a period of which 109 thousands are owed. Petronas Argentina has secured a material amount of transportation and dispatch capacity in the min-train sector. Combining the Vaca Muerta Norte and the Old El Val pipeline, we are adding 57,000 barrels of oil per day of film transportation, 90,000 in Old El Val Open Access, 70,000 in Duplicar, and 21,000 in Vaca Muerta Norte. Based on Q4 2024 production data, more than 20,000 barrels per day, or around 40% of this capacity, was either providing ample room for growth and synergies with our development hub. With this strategic transaction, we are doubling down on Vaca Muerta, increasing our exposure to short-cycle low-break-even shell assets. This will improve our short and medium-term cash flow profile, as well as our long-term value proposition for shareholders. This constitutes a highly accredited transaction for our shareholders. A debit to EBITDA of two times, EBIT per flowing barrel of $33,000, and price to earnings of 3.8 times. The transaction multiples comparable very positively to Vista's own trading methods. We have consolidated a low-cost, high-margin, cash-generating asset. The Margaritica lifting cost was $4.1 per VOE in 2024, reflecting a robust operating model and solid well-productivity. On performance basis for 2024, the acquired company improved our adjusted EBITDA by 61%, strengthening our cash flow profile. On the same basis, adjusted EBITDA margin improves by three percentage points from 65% to 68%. The transaction also increases our scale and enhance our portfolio. On a performance basis, our total production for Q4 2024 will be 125,000 BOE per day, an increase of 47%. As discussed earlier, P1 reserves and acreage are also significantly enlarged. After our estimation, La Amarga Chica has an inventory of 200 wells to be drilled at our 50% working interest. We are therefore increasing our inventory by 20%, adding wealth located in a premium area of Vaca Muerta around Bajada del Palo Este, a region we know extremely well and which has consistently delivered extraordinary value to our company. Based on La Marga Chica's proximity to our development hub, our analysis shows there are very clear synergies we can capture related to sharing facilities, optimizing well placement close to the limit between the blocks, streamlining new well designs, and potentially sharing general services. Importantly, the acquired company holds material oil metering capacity. By adding 57,000 barrels of oil per day of contracted pipeline capacity, we have reached almost 200,000 barrels of oil per day capacity on a performance basis, excluding trucks. We are thrilled to be consolidating a high-margin, low-break-given asset with very clear synergies with our ongoing operations. Based on the scale and importance of this consolidation, we are currently working on a revised version of our 2025 plan. We are therefore removing our 2025 market guidance, and we will present an update guidance in our Q2 earnings call. I will make some closing remarks before we move on to Q&A. On the operational front, we have made solid progress during the quarter. Production increased 47% year over year, driven by 49 new wells drilled and connected in the last 12 months. We reached a major milestone as the duplicate pipeline came online, adding 31.5 thousand barrels of oil per day of oil transportation capacity. materially reducing our selling expenses quarter on quarter, and fully eliminating tracking volumes of a quarter end. Yet, the most important achievement was on the M&A front, with execution of a transformational deal for our company. Our track record shows that we are a company that cannot value through its active operations, as well through business development. With acquired assets, we incorporate flowing production, material EBITDA, and cash flow generation, premium new well inventory, field metering capacity, and potential synergies as accretive acquisition multiples. Following this M&A transaction, Vista emerged with an improved cash flow profile and higher margins. which is very relevant in the backdrop of a high market volatility. And I think more importantly, reflects our constructive long-term vision on Vaca Muerta and long-term global oil price fundamentals. Before we move to Q&A, I would like to thank the entire VISTA team for their hard work in this quarter. And specifically, I would like to send the M&A team for the understanding transaction that just concluded. Operator, we can now move to Q&A.