Vista Energy, S.A.B. de C.V. (VIST) Q4 2022 Earnings Call Transcript

Vista Energy, S.A.B. de C.V. (NYSE:VIST) Q4 2022 Results Conference Call February 24, 2023 9:00 AM ET

Company Participants

Alejandro Chernacov - Co-Founder and Strategic Planning & IR Officer

Miguel Galuccio - Founder, Chairman & CEO

Conference Call Participants

Alejandro Demichelis - Nau Securities

Regis Cardoso - Credit Suisse

Andres Cardona - Citi

Walter Chiarvesio - Santander

Rodrigo Nistor - Latin Securities

Operator

Good day, and convey you for opinionated by. Welcome to nan Vista's Fourth Quarter 2022 Earnings and Full Year Webcast Conference Call. [Operator Instructions] Please beryllium advised that today's convention is being recorded.

I would now for illustration to manus nan convention complete to your speaker today, Alejandro Chernacov. Please spell ahead.

Alejandro Chernacov

Thanks. Good morning, everyone. We are happy to invited you to Vista's Fourth Quarter and Full Year 2022 Results Conference Call. I americium present pinch Miguel Galuccio, Vista's Chairman and CEO; Pablo Vera Pinto, Vista's CFO; and Juan Garoby, Vista's COO.

Before we begin, I would for illustration to tie your attraction to our cautionary statements connected Slide 2. Please beryllium advised that our remarks today, including nan answers to your questions, whitethorn see forward-looking statements. These forward-looking statements are taxable to risks and uncertainties that could origin existent results to beryllium materially different from expectations contemplated by these remarks. Our financial figures are stated successful U.S. dollars and successful accordance pinch International Financial Reporting Standards, IFRS. However, during this convention call, we whitethorn talk definite non-IFRS financial measures specified arsenic adjusted EBITDA and adjusted nett income. Reconciliation of these measures to nan closest IFRS measurement tin beryllium recovered successful our net merchandise that was issued yesterday. Please cheque our website for further information.

Our company, Vista is simply a [Foreign Language] superior adaptable organized nether nan laws of Mexico, registered successful Bolsa Mexicana de Valores and nan New York Stock change. The ticker of our communal banal are VISTAA successful nan Bolsa Mexicana de Valores, VIST successful nan New York Stock Exchange. And nan ticker of our warrant is VTW408A.

I will now move nan telephone complete to Miguel.

Miguel Galuccio

Thanks, Ale. Good morning, everyone. Today, I will share pinch you nan 4th fourth and afloat twelvemonth results of 2022 successful which we person continued to present a beardown operational and financial performance. First, I will coming nan 4th fourth results and past we later move connected to afloat twelvemonth results and 2023 guidance, and I will besides remark connected nan transaction we closed and announced yesterday.

During Q4, 2022, full accumulation averaged [54,700] BOE per day, a 33% summation year-over-year. Oil accumulation was up 41% year-over-year driven by nan tie-in of 1 4-well pad successful Bajada del Palo Oeste and different successful Aguada Federal. Total revenues were $308 cardinal for nan quarter, an interannual summation of 57% driven by higher accumulation and stronger realized lipid price. Lifting costs per BOE was $7.2 for nan quarter, reflecting our occurrence successful containing costs unit done a number of ratio measures arsenic good arsenic dilution successful nan fixed costs done incremental accumulation volumes.

Capital expenditure was $145 cardinal including nan drilling of 8 wells and nan completion of 7 wells during nan quarter. Adjusted EBITDA during Q4 2022 was $202 million, a 73% summation year-over-year, driven by higher accumulation and realization prices and little lifting costs per BOE. During Q4 2022, we grounds affirmative free rate travel of $57 million, driven by robust adjusted EBITDA generation. Net leverage ratio astatine 4th extremity was 0.4x adjusted EBITDA. Adjusted nett income was a coagulated $171 cardinal including and not recurring affirmative adjusted of $98 cardinal of income tax, implying a quarterly adjusted EPS of $2 per share.

We will now heavy dive into our main cognition and financial metrics for nan quarter. Total accumulation during Q4 2022 was 54,700 BOEs per day, up 33% interannually and 8% sequentially. Oil accumulation was up 41% year-over-year, chiefly driven by nan tie-in of pads Bajada del Palo Oeste-14 and Aguada Federal-3. Total shale lipid production, which besides includes Bajada del Palo Oeste accrued to 36,200 barrels of lipid per day, representing 79% of lipid production.

Moving to Slide 5. I will stock immoderate specifications connected our projects successful Vaca Muerta. In Bajada del Palo Oeste, we continued to study robust lipid productivity. We person tie-in 60 wells today, from which 40 person exceeded 360 days of accumulation and are producing connected mean 3% supra our Bajada del Palo Oeste type curve. During Q4, we completed pad Bajada del Palo Oeste-15, which was tie-in precocious successful nan year. These pads has 5 wells, of which 3 were landed successful La Cocina and 2 successful nan Organico. We are seeing very bully productivity regions successful these wells, which are performing supra our type curve aft 40 days connected production. Also, we precocious started to drill 4-well pad Bajada del Palo Oeste-16, which we scheme to tie-in during Q2.

In our Federal accumulation accrued to 5,800 BOE per time during Q4, 2022. The artifact contributed 14% of our full shale accumulation boosted by pads Aguada Federal-2 and Aguada Federal-3. We person precocious vanished drilling 4-well pad Aguada Federal-4, landing 2 wells successful La Cocina, 1 good successful nan Organico and 1 good successful Middle Carbonate, which we person not tested successful Aguada Federal truthful far. We scheme to complete and tie-in this pad by nan extremity of Q1.

During Q4 2022, we made bully advancement successful our aviator successful Bajada del Palo Este. We drilled, complete and tie-in 1 good successful Bajada del Palo Este-3, landed successful La Cocina and eastbound portion of nan block. We are presently drilling pad Bajada del Palo Este-2, which contains 2 wells La Cocina. We scheme to tie-in these wells during April, aft which we will person fulfilled our finance committedness successful this block. In Aguila Mora, we completed our first 2-well pad successful January. We landed 1 good successful La Cocina and 1 good successful Middle Carbonate. We are presently moving connected nan impermanent accumulation accommodation for nan block, which is scheduled for completion successful April. Our scheme is to tie-in nan wells aft that event.

Total revenues successful Q4 2022 were $308.1 million, a 57% summation year-over-year driven by accumulation maturation and stronger registration prices. During nan 4th we normalized our inventory pinch a buildup of 238,000 barrels. Realized lipid value for nan 4th averaged $68.9 per tube and interannual summation of 14%. The mean realized home value was $67.2 per barrel. This fig does not see trucking proscription costs from income constituent to refinery, including specified cost, nan home realized lipid prices was $63.3 per barrel. The mean realized value of nan export marketplace was $74.1 per barrel, reflecting softer brands and higher shipping costs.

For nan 2nd consecutive 4th much than 50% of our full gross came from nan export market. Sales to world marketplace accounted for 52% of lipid volumes and 56% of lipid revenues. We exported 4.5 cargoes during nan 4th aliases 2.2 cardinal barrels of lipid successful total. We expect to support this level of export during nan coming 4th arsenic well. Realized state prices were $4.5 per cardinal BTU, an summation of 65% year-over-year, chiefly boosted by income to our business customers astatine $3 per cardinal BTU applicable to 44% of our income volumes, and export to Chile astatine $8.8 per cardinal BTU applicable to 26% of our income volumes.

Total lifting costs for nan 4th was $36.1 million. We person successfully implemented costs redeeming initiatives chiefly nan pipeline from Aguada Federal to Bajada del Palo Oeste, which reduced lipid proscription costs. Additionally, nan boost successful accumulation measurement continues to dilute fixed costs, starring to an 11% simplification successful lifting costs per BOE year-over-year. Adjusted EBITDA successful Q4 2022 was $201.7 million, implying a 73% maturation year-over-year. This reflects beardown gross maturation and nan simplification successful lifting costs, I mentioned previously. Adjusted EBITDA separator was 65% during nan quarter, an interannual betterment of 6 percent points. Netback was $40.1 per BOE, a 30% summation year-over-year, driven by higher lipid prices and little lifting costs per BOE.

During Q4 2022, we proceed to make affirmative free rate travel for a full of $57.2 million. Cash from cognition activities during nan 4th accrued 55% interannually to $215.4 million. Cash travel utilized successful finance activities was $158.2 million. Capital expenditure was $145.2 cardinal connected existent accrual basis, of which $98 cardinal were invested successful caller wells successful our Vaca Muerta project, USD31 cardinal successful accommodation and USD16 cardinal successful different insignificant projects. Cash travel generated by financing activities stood astatine $8.8 cardinal during nan quarter. We successfully refinanced $108.5 cardinal of 2023 maturity, of which USD45 cardinal are now owed successful 2025 and USD63.5 cardinal successful 2026. We besides refinanced $40.5 cardinal of 2024 maturities, which owed successful 2025. This extended nan mean life of our indebtedness from 2.4 years to 2.8 years and trim mean indebtedness costs from 6% to 4.4%.

Gross indebtedness stood astatine $549.3 cardinal astatine nan extremity of Q4 2022. The flimsy summation compared pinch Q3 2022 was driven by indebtedness issuance to repay $22.5 cardinal installment of our word indebtedness successful January. After this payment, gross indebtedness has stood astatine $526.8 million. After this indebtedness repayment and owed to our successful refinancing effort astatine nan extremity of nan past year, we only person $45 cardinal indebtedness maturities remaining successful 2023. Net leverage ratio stood astatine a very patient 0.4x adjusted EBITDA astatine 4th end.

I will now move to our afloat twelvemonth results. During 2022, we person continued to present connected our superior shareholder return proposition. We besides achieved robust capacity vis-a-vis our 2022 guidance. We further expanded our outer reserve base. Our P1 reserves accrued to 251.6 cardinal BOE year-end, implying reserve replacement ratio of 495%. The acquisition of Aguada Federal and Bandurria Norte led to nan summation of 300 caller wells to our inventory. Also our successful results successful nan first 2 wells successful Bajada del Palo Este, led to an summation of 50 caller wells, expanding our inventory successful Vaca Muerta to 900 wells successful total.

In 2022, we delivered coagulated operational performance. Production for nan twelvemonth was 48,600 BOE per day, a 25% summation year-over-year and good supra our 47,000 BOE per time guidance. Oil accrued 32% year-over-year, driven by higher lipid contented successful our shale oil. We exported 44% of our lipid income volumes, which make 52% of full lipid sales, driven by higher realization prices successful nan export market. We reduced lifting costs from $7.6 to $7.5 per BOE year-over-year, reflecting our export to power costs successful a challenging FX situation and delivering connected our guidance.

During 2022, we besides made bully advancement successful our sustainability program. We proceed to put successful decarbonizing our operations. This has led to a 2% driblet successful absolute emissions successful nan twelvemonth during which accumulation accrued 25%, therefore, reducing emissions strength from 24 to 18 kilos of CO2 balanced per BOE. Concurrently, we person initiated nan first 4 projects connected our nature-based solution portfolio. I will heavy dive into this matter later during nan presentation.

Regarding shareholder returns, we person a grounds year. We adjusted EBITDA astatine $765 cardinal exceeding our guidance. Return connected superior mean worker came very beardown astatine 40% for nan twelvemonth and truthful was our bottommost statement pinch an EPS of $4.2 per share, a free rate travel of $197 million. We person applied portion of this rate to trim gross indebtedness by $84 cardinal during nan year. We person besides repurchased 3.2 cardinal shares for a full of $29 million, driven by execution of our strategical scheme and successful a contracted discourse for world commodity prices, our stock value [tripled] during 2022.

Proved reserves accrued 39% vis-a-vis 2021 for a full of 251.6 cardinal BOE estimated astatine nan year-end 2022. This implies a full reserves replacement ratio of 495% and 515% for oil. Proved reserve life accrued to 14.2 years. This maturation reflects nan value of our backmost commodity acreage and our expertise to make integrated and profitable growth. Net additions were 87.8 cardinal BOE, driven by activity successful Aguada Federal wherever we added 40 caller wells locations. Bajada del Palo Oeste, wherever we added 32 caller good locations and Bajada del Palo Este wherever we added 4 good locations. This resulted successful a full of 210 booked good locations successful our P1 reserves. The certified coming worth astatine 10% discount complaint attributable to Vista's liking successful proved reserve of $3.2 billion, utilizing a value presumption of $72 per tube for lipid and [$3.5] per cardinal BTU for gas, according to SEC guidelines.

During 2022, we made important achievements connected nan operational front. The execution of our [work program] led to nan tie-in of 28 caller shale lipid wells during nan year. Therefore, full wells and accumulation accrued from 40 to 68 wells, driven an summation of 25% successful full accumulation and 49% successful shale lipid accumulation year-over-year. 20 of nan caller wells were successful Bajada del Palo Oeste. In addition, pinch tie-in sequels successful Aguada Federal, which we incorporated into our halfway improvement area by connecting done a pipeline to Bajada del Palo cluster. We besides initiated a aviator successful Bajada del Palo Oeste, wherever we tie-in nan first 2 wells successful Q1 2022, showing robust productivity results.

In July, we started operating our ain soil excavation and soil washing plant, improving soil logistics and cost. The works is already supplying Vista wells and is designed to service 100% of our soil needs astatine afloat capacity, which is forecasted to beryllium reached by mid-year. We person besides made bully advancement successful expanding our lipid curen capacity. We finalized our upgrade of nan lipid curen plant, wherever we travel they Bajada del Palo cluster production, expanding its capacity to 57,000 barrels per day. We are actively moving connected different upgrade, which will further summation nan capacity of nan works to 69,000 barrels per time by nan 3rd 4th of this year.

Finally, we achieved 2 awesome milestones related to lipid removal projects. In OldelVal, nan pipeline linking Vaca Muerta to Puerto Rosales we person been awarded 31,500 barrels of lipid per time capacity successful that description project. In summation to 42,700, we already person successful nan existing pipeline. We were besides awarded 37,400 barrels of lipid per time of throughput capacity successful OTE larboard description successful Puerto Rosales. Our capacity successful these 2 projects will springiness america accrued entree to exporting done nan [Indiscernible]. We person agreed to prepay 100% of our capacity successful OldelVal and 50% of our capacity successful OTE, which intends an estimated finance successful nan shape of prepayment to suppliers of USD77 cardinal successful 2023 and USD60 cardinal successful 2024 and USD11 cardinal successful 2025. The agreements we person signed for these 2 projects, represent a awesome milestone for our maturation plan. We mixed secured word imaginable capacity, including our existent capacity successful OldelVal, we leased 74,300 barrels of lipid per day, which is much than is needed to present our 2026 accumulation target and has further upside, owed to different ongoing process.

We are presently moving pinch different upstream subordinate to create an further pipeline capacity from nan halfway area of Vaca Muerta, wherever we tin thin into our accommodation to nan northbound of nan basin connecting pinch existing [Indiscernible] to Chile. We deliberation this could besides make an removal way for [exports to nan Pacific]. During 2022, we person made coagulated advancement connected each our ESG plants. As discussed earlier, nan execution of our decarbonization projects drove a simplification of our c strength from 24 to 18 kilos of CO2 balanced per BOE year-over-year. Crucially, during Q4 2022, we person recorded an strength of 14 kilos, arsenic nan effect of nan task implemented during nan twelvemonth materializing full, leaving america astatine a very coagulated starting constituent for 2023. We besides signed a semipermanent powerfulness acquisition statement pinch a starring supplier of energy from renewable sources. We scheme to screen astir 20% of our powerfulness needs from renewables successful 2023 and gradually summation this twelvemonth successful coming years. This will lend importantly to reducing our Scope 2 emissions.

During 2022, we made headway successful nan improvement of our nature-based solution portfolio. We group up Aike, a Vista subsidiary to design, negociate and execute our c offset projects. Aike a group up pinch starring section master and attraction connected nan improvement of a mixed forestry, wood conservation and ungraded seizure done sustainable agriculture and livestock practices successful Argentina. In its first twelvemonth of operation, Aike purchased onshore successful nan [Technical Difficulty] wherever we planted 1,080 hectares, singed a binding committedness to acquisition 5,000 hectares for nan wood conservation projects successful nan state of Salta and signed sustainable farming and livestock statement covering a full of [3,800] hectares successful nan Province of Cordoba, Santa Fe, Buenos Aires and Rio Negro. Considering our coagulated advancement successful decarbonization and NBS projects, we are good connected way to fulfill our Scope 1 & 2 Net Zero ambition by 2026.

On nan societal front, we achieved full information results signaling a full recordable incident complaint beneath 1 for nan 3rd twelvemonth successful a row. We person made bully advancement successful our gender initiatives done hiring and processing female talent, issuing caller policies and moving workshops to summation worker awareness. We besides group up a Social Management System, a model to support and create societal projects pinch our section communities, externally audited and pursuing IFC standards. Finally, we person continued to fortify our governance, issuing caller policies related to business morals and implementing a nationalist grievance system connected our website.

I judge this descent conveys really our stronger capacity springiness measurement to a robust full shareholder return successful 2022. Our beardown profitable accumulation [drove] rate procreation and led to affirmative free rate flow, reaching almost $200 cardinal successful 2022. This has enabled america to further deleverage our company, reducing gross indebtedness by $84 million. This translated successful a very coagulated nett leverage ratio of 0.4x EBITDA astatine year-end 2022. In position of nan value of our results, return connected mean superior worker very quickly reached 40% and adjusted EPS accrued by 4x year-over-year. We person besides allocated $50 cardinal to nan first 2 stages of our stock buyback program. These important achievements were positively reflected by our stock value capacity was tripled successful 2022.

Moving to Slide 15, yesterday, we announced a transaction that will let america to go afloat focused connected Vaca Muerta shale lipid development. The transaction is system arsenic an innovative 2-phased statement pinch Petrolera Aconcagua, covered nan accepted concession shows engaged successful grey connected nan map. As of March 1, 2023, Aconcagua will go nan usability and salary 100% of nan OpEx, CapEx, royalties and taxes of specified assets. Vista will stay concession title holder until last closing date, which will beryllium nary later connected February 28, 2027. At this time, 100% ownership will beryllium transferred to Aconcagua taxable to provisional approval.

Vista will person nan information composed of 3 items: First, a costs of $26.5 cardinal successful installments. Second 40% of lipid and state produced by nan artifact for nan adjacent 4 years; and 100% of nan LPG and condensate clear of afloat cost, taxation and royalties. The information payable successful lipid and state measurement has nan minimum warranty measurement of 4 cardinal barrels of lipid and 3 cardinal cubic meters of gas. Third, nan correct to acquisition Aconcagua's 60% stock of state accumulation astatine $1 per cardinal MBTU. For specified gas, we will beryllium making a separator of astir $3.5 per cardinal BTU astatine existent price. Importantly, nan lipid curen works geographically located successful Entre Lomas pinch a capacity of 57,000 barrels of lipid per time is not included successful this transaction. Also Vista clasp nan correct to create nan Vaca Muerta play successful each nan concessions.

According to our estimated and realized prices of USD65 per tube of lipid and USD4.5 per cardinal BTU of gas, nan full worth to Vista pinch nan transaction could scope a nominal worth of astir $400 million. This will let Vista to afloat attraction connected nan improvement of Vaca Muerta, while streamlining our portfolio and boosting our financial and operating metrics. The transaction will person contiguous use connected our metrics. In 2023, we forecast simplification successful lifting costs per BOE of 25% arsenic good arsenic an summation successful adjusted EBITDA separator by 5 percent points to 71%, contempt nan truth that we will beryllium consolidating [50%] of nan accumulation from these accepted assets, estimated astatine 5,000 BOE per day. The EBITDA effect is neutralized by nan [full betterment of our] operating expenses and royalties.

When taking into information nan CapEx transportation and nan moving superior effect, these transactions make $30 cardinal successful incremental free rate travel for Vista, which will beryllium invested successful expanding crude lipid carrier infrastructure to summation exports. That will besides amended our expertise to present connected our 2026 target done further free rate flow. We've forecast an further nett rate generated of astir $100 cardinal betwixt 2023 and 2026 arsenic a consequence of nan transaction. Our portfolio will beryllium stronger pinch investments nonstop to higher IRR shale lipid project, starring to higher firm return connected superior employee, and adjusted EBITDA margins.

I will now coming our 2023 guidance, reflecting double-digit maturation successful accumulation and adjusted EBITDA. This scheme coupled pinch our robust transportation during 2022, time off america good connected way to present connected our 2026 target. Our improvement strategy is to afloat attraction connected processing our halfway areas and finalize nan aviator successful Aguila Mora and Palo Este to scope specified blocks. During 2023, we scheme to tie-in 29 wells, 16 successful Bajada del Palo Oeste, 8 successful Aguada Federal, 3 successful Bajada del Palo Este and 2 successful Aguila Mora. These tie-ins are forecasted to present 55,000 BOE per day, a 13% summation year-over-year. Exit complaint is forecast astatine astir 60,000 BOE per day. This is planned to occur, moreover arsenic we deconsolidate 50% of nan accumulation of our accepted assets arsenic of March 1, which will region astir 5,000 BOE per time connected our accumulation base. Lifting costs is forecasted to driblet 27% year-over-year to $5.5 per BOE, chiefly driven by nan deconsolidation of nan accepted assets.

Adjusted EBITDA is estimated successful $850 cardinal to $900 cardinal range, based connected a realization value betwixt USD65 and USD68 per barrel. This implies an interannual maturation of 11% to 18%. Our planned CapEx is $600 million, driven by somewhat higher drilling and completion activities and upfront finance successful curen accommodation to summation capacity for nan hardware growth. Greenhouse state emanation strength is forecasted to trim from 18 to little than 10 kilos of CO2 balanced per BOE. This simplification captures nan afloat twelvemonth effect of nan projects executed successful 2022 arsenic good arsenic partial effect of nan 2023 projects. Overall, we are very assured that Vista is good connected way to present connected nan semipermanent target percent astatine our Investor Day successful December 2021. Moreover, we spot imaginable for overdeliver successful our production, ratio metrics and free rate travel targets.

We will now spell done nan cardinal takeaways of today's presentation. 2022 was a twelvemonth of robust operational and financial performance. We person delivered our positively revised 2022 guidance and made bully advancement towards our 2023 target. We besides delivered connected our superior full shareholder proposition. We reduced gross debt, repurchased 3.2 cardinal shares and approved nan warrants speech past October. This led to a peer-leading banal performing during 2022. We signed an innovative woody that will toggle shape Vista into afloat focused Vaca Muerta company, pinch improved operational and financial metrics. Finally, we person issued guidance for 2023 portraying double-digit maturation successful accumulation and adjusted EBITDA pinch higher margins.

Before we move to Q&A, I would for illustration to convey our investors for their continued support and each nan squad astatine Vista for their committedness and difficult work, which were cardinal successful generating this connected nan standalone results.

And pinch that, operator, please unfastened nan statement for Q&A.

Question-and-Answer Session

Operator

[Operator Instructions] Our first mobility comes from nan statement of Alejandro Demichelis from Nau Securities.

Alejandro Demichelis

Congratulations connected nan deal. Miguel, speedy question. You conscionable mentioned that you spot imaginable to overdeliver connected nan 2026 target. So could you benignant of locomotion america really you are seeing those targets now because you're lowering your rate cost, you're reducing your emissions importantly done nan sale, you're having much money successful nan bank, you're having removal capacity. So really overmuch much tin you overdeliver? Or tin you bring those targets guardant rapidly?

Miguel Galuccio

Yes, I mean we -- if you remember, for 2026, we fundamentally guideline that we were going to beryllium astir 80,000 tube per time and USD1.1 cardinal of EBITDA, and we are good connected track. And arsenic I said successful nan presentation, we judge that we will surpass that nonsubjective that we put ourselves. When you look astatine 2023, our guidance already successful word of EBITDA is betwixt USD850 cardinal and USD900 million. So pinch that, I deliberation we will beryllium good ahead. Other point to see connected nan scheme that we coming December 2021. We -- our commodity value astatine that clip was astatine [$60] and coming we are moving pinch higher commodity price. So that besides will help.

Regard activity, of course, I mean this year, our scheme is to afloat utilize nan capacity that we have. We will beryllium moving pinch [1.5 rig] pinch a CapEx of astir $600 million, portion of that CapEx. So important portion of that CapEx is going to beryllium dedicated to facilities. In 2024, of course, besides we tin displacement immoderate of that CapEx to having further activity successful word of much drilling. We could move from [1.5 drilling rig to 2 drilling rig]. You spot nan interaction is still nan 1 that we person today, that we judge that could beryllium nan case. So cutting nan agelong communicative short, I deliberation we are good up to present what we group for 2026, and you should expect that we will surpass our accumulation and besides nan EBITDA target that we put successful nan investor call.

Alejandro Demichelis

That's great. And arsenic a mini follow-up, really are you reasoning astir those rate returns that you mentioned to shareholders pinch a caller setup?

Miguel Galuccio

The rate return still successful spot is thing that we support into mind. This twelvemonth will beryllium a peculiar twelvemonth because we will put successful a batch successful accommodation for nan early growth. Now 2024 from nan rate constituent of view, it could beryllium -- I mean, by plan, it look to beryllium a very bully year. And returning rate to shareholder aliases returning to shareholder is thing that we support successful mind. Remember, we person a buyback programme that we are executing that was approved past December. We person $20 cardinal to execute of that buyback programme that for america is 1 of nan measurement of returning to shareholders that proceed successful spot and we will proceed executing that.

Operator

Our adjacent mobility comes from nan statement of Regis Cardoso from Credit Suisse.

Regis Cardoso

Miguel, Alejandro, congratulations connected nan deals connected nan very beardown results. My mobility really is simply a chat on, connects very good pinch nan erstwhile question. Now pinch nan bully results you've had, but still pinch nan constrained superior travel restrictions successful Argentina, I wanted to get a consciousness of what you deliberation is basal aliases what would beryllium a bully statement that Argentina could instrumentality to foster nan investments and to let nan lipid companies to remunerate their shareholders? I mean, successful nan past, we've talked astir retaining immoderate of nan dollar from exports, for example. So I'm asking this now, Miguel fundamentally because you've now again, divested an plus looks astatine very charismatic valuation, but it looks for illustration you're generating a batch of liquidity successful nan company, right? So nan mobility really is what tin beryllium done pinch that liquidity?

Miguel Galuccio

Yes, you're wholly right, and we person nan aforesaid target. Let maine group first, I mean, 1 of things that we person successful manus coming is nan decree to [7.7]. I deliberation our main nonsubjective is that this decree that was put successful spot and was afloat regulated by nan government. So that intends that they person fulfilled each nan process that they person to -- they will person to put successful spot successful bid for nan decree to beryllium operational. It's already fulfilled from nan authorities side. It's besides fulfilled from our side. We person presented everything and fundamentally today, we person a first declare of $36 cardinal that is successful spot and we are waiting for nan Minister of Energy, fundamentally to merchandise nan certificate of that declare that we person done, okay. So I will opportunity that is what we person to support pushing. And if a decree that was put successful place, that fundamentally is bully for nan industry, and I deliberation bully for nan country, since each that money coming is consequence of investment. And it's nan first point we request to attraction on.

Second, I would for illustration to comment, successful position of CapEx. The 2023 is simply a twelvemonth wherever astir of nan CapEx -- astir of nan rate that we generate, it will beryllium translated to CapEx, because we request to put successful accommodation because it's a infinitesimal that we person to upgrade our capacity successful bid to fulfill nan scheme that we person to 2026. 2024 is simply a twelvemonth wherever we person a beardown rate procreation and not that finance successful facilities. Therefore, for that to person that decree and astir apt different things that could come, I expect it will travel from a caller economical authorities owed to nan predetermination that we will person this year, I deliberation will beryllium successful place.

Between astir of nan parties, immoderate politicians today, too -- I mean, successful comparison wherever we person astir apt 4 aliases 5 years ago, Vaca Muerta is nan cardinal for nan state to entree to U.S. dollar and to entree to that U.S. dollar, we request to proceed investing and we request to proceed increasing nan accumulation successful bid to create much export volume. I deliberation this is very clear crossed nan board. So I'm affirmative that immoderate happened aft nan election, that will beryllium portion of thing that will beryllium very precocious successful nan schedule successful nan caller government, okay? So I don't deliberation I tin show you much than that. Concrete nan decree to 7.7 . And past of people we are hopefully that we tin do moreover amended than that.

Operator

Our adjacent mobility comes from nan statement of Andres Cardona from Citi.

Andres Cardona

Congratulations connected nan very beardown results successful 2022, not only connected nan financial front, but besides connected nan reserves and moreover connected nan locking worth strategies. Let maine commencement from that past idea. You person been very progressive connected nan M&A front. Do you spot much room to do thing other successful 2023, possibly workplace retired immoderate moving liking astatine Vaca Muerta [Indiscernible] to accelerate improvement aliases thing else?

And nan 2nd mobility is pinch specified a debased leverage and beardown rate flow, what is holding you backmost to accelerate nan improvement of nan projects? Is it thing about, I don't cognize if facilities. It's our institution argumentation to activity connected a caller proceedings rate travel basis. So conscionable wanted to understand what is holding you backmost from accelerate connected nan accumulation front?

Miguel Galuccio

And I will commencement from nan 2nd question. As you know, today, successful 2023, we person a scheme that fundamentally is aforesaid to fulfill nan aged capacity that we have. And that aged capacity, we are going to fulfill it because we are going to beryllium exiting 2023 pinch 60,000 BOEs, okay, that will let america to usage each azygous portion of capacity that we person successful our accommodation and besides successful nan main pipeline that connects pinch export larboard successful Bahia Blanca. Going forward, arsenic I mentioned before, I mean what we spot is that 40% of nan capacity that Bahia is going to create, is going to beryllium present successful 2024 and nan remainder 60% of that further capacity is going to beryllium released successful 2025. That will let america to turn further.

And to turn further, I mean, successful 2024, what coming we tin deliberation of, is to astir apt adhd 0.5-rig. So to spell to a 2-rig programme that will return america from 30 wells chiefly to 40 wells. But keeping successful mind that we ever person been successful our program, nan rate travel generation. This is thing that we are ever looking at. We fundamentally are aiming to make rate and to return portion of that to our shareholders. And again, I mean erstwhile we don't person further capacity, nan dynamics arsenic we coming successful our Investor Day, it will beryllium related to really overmuch rate we generate, really overmuch we want to pump into further activity, and really overmuch we want to return to our shareholders. And of people you spot because you tally nan numbers, that rate procreation is going to beryllium truthful reached that we besides person nan state to proceed looking an M&A transactions.

So far, what we person done has been very focused connected expanding acreage successful Vaca Muerta, wherever we person done very good pinch nan acquisition of Aguada Federal, not only from nan economical constituent of position because we bought halfway acreage astatine a very bully rate. But besides arsenic nan business improvement squad execute this 4th and nan transaction that helps america to beryllium a axenic subordinate successful Vaca Muerta pinch a very focused organization, reducing our lifting costs and expanding our margins, okay. So again, thing that you should expect from nan M&A constituent of view, but we ever -- we did truthful acold looking to really we tin amended our numbers and our returns successful our margins.

Operator

Our adjacent mobility comes from nan statement of Walter Chiarvesio from Santander.

Walter Chiarvesio

Congratulations for nan results. I would for illustration to inquire you if you person a much circumstantial breakdown connected nan CapEx, specifically, nan $600 cardinal CapEx, particularly betwixt what is accommodation this year, what is nan nonstop finance successful accumulation [Technical Difficulty]. That is my first question. And nan second, to make clear is, you are investing successful nan OldelVal description and you're awarded 31,500 barrels per time pinch this caller description . But you mentioned successful nan position that you person a full capacity of 34,300 barrels per day. The quality betwixt this 31,000 and nan 34,000 is already [Technical Difficulty] thing that you person secured? Or is it thing that is down year-over-year? Those are my questions.

Miguel Galuccio

So fto maine springiness you first a breakdown of nan CapEx and hopefully that became much clear to you. So conscionable to springiness you nan breakdown first of 2022 arsenic a baseline to comparison pinch '22 and '23. We basically, successful 2022, we spent $360 cardinal successful Vaca Muerta wells, astir $100 cardinal successful facilities, location was astir USD60 cardinal successful others and USD5 cardinal successful Mexico. We spent astir $540 cardinal successful full CapEx. This CapEx is expanding to $600 cardinal successful 2023, chiefly owed to facilities. So erstwhile you look astatine nan CapEx successful 2023, it's going to beryllium $380 cardinal successful Vaca Muerta wells, nan 20 caller wells that we put successful our plan. Now accommodation are from astir $100 cardinal to $140 million, that fundamentally includes an upgrade of nan 3 main facilities, gathering facilities,compression facilities.

So everything that we request to summation our capacity to fundamentally everything that we request to present a scheme that we put together for 2026. So our capacity successful Entre Lomas for illustration is going to spell each nan measurement up to 80,000 barrels of lipid per day. So that is simply a large update. The remainder connected -- is still nan same. And we will spot -- we besides will spot because we will summation nan activity successful Mexico. In Mexico past twelvemonth we invested $5 million. This year, we will drill fewer wells, truthful that spell to $80 million. But main summation successful CapEx is related to facilities, and successful bid to beryllium fresh to beryllium prepared for 80,000 BOE that we person successful nan Investor Day.

The different mobility was related to OldelVal. So OldelVal task is simply a task that will adhd capacity to nan manufacture of 350,000 tube lipid per time of removal capacity connected nan apical that we person today. It's a task that it would require a CapEx of $1.1 billion. And Vista was awarded 10% of that capacity, okay. That task for america successful word of CapEx required an finance of $118 million, that is going to salary successful 3 installments of $54 cardinal successful 2023, $10 cardinal successful 2024 -- no, USD54 cardinal successful 2024 and USD10 cardinal successful 2025. And I person -- I cognize and successful tariffs of $0.6 per barrel. So what you should expect successful position of capacity -- further capacity for america is 31,000 barrels of lipid per day.

Walter Chiarvesio

All right. But nan full contracted capacity is 34,000, okay. Is that correct?

Miguel Galuccio

Today, it's 42,000 and we will adhd 31,500.

Walter Chiarvesio

Okay. Perfect. Understood.

Miguel Galuccio

So pinch that we will beryllium -- we will person capable capacity to execute our scheme basically.

Walter Chiarvesio

Perfect. And nan follow-up question. If -- really we should spot -- you mentioned that nan CapEx [Technical Difficulty] beryllium reduced successful 2024, because you are not investing overmuch successful facilities. What would beryllium nan number that we should exemplary -- successful our model?

Miguel Galuccio

You trim off, could you repetition nan question?

Walter Chiarvesio

I mean, you mentioned that 2023 is going to beryllium for illustration a precocious CapEx twelvemonth $600 million, but successful 2024 CapEx, particularly accommodation should beryllium lower. So really overmuch would beryllium nan CapEx for 2024? Or assuming that you'd person akin numbers of wells, et cetera? I mean, it should beryllium lower.

Miguel Galuccio

Yes, if I was you, I would play. So intelligibly installation is going to spell down from today, it's $140 million, $150 cardinal to much adjacent to $100 million, 2024 and further down successful 2025, we said $50 million, $60 million. Now past you person to play pinch nan truth that what we doing to successful position of acceleration of drilling activity, it is imaginable that we accelerate arsenic I said earlier to move from 1.5 rig to 2 rigs. And that it could bring a spot of other CapEx to nan improvement broadside of nan CapEx.

So for example, it's not unthinkable that successful 2024, moreover though we spent $40 cardinal aliases $50 cardinal little connected facilities, we transportation that CapEx into wells, because we want to accelerate our program. If nan commodity prices still are nan measurement that it is coming and pinch nan capacity that we are having, pinch nan portfolio that we person and pinch nan improvement costs and lifting costs that we have, it could beryllium reasonable that we want to accelerate.

Operator

Our adjacent mobility comes from nan statement of Rodrigo Nistor from Latin Securities.

Rodrigo Nistor

Congratulations connected nan beardown resources quarter. I'm funny astir nan imaginable effect of nan upcoming predetermination present connected home prices and really Vista plans to navigate immoderate imaginable fluctuations? And past additionally, I noticed that location person been immoderate caller discounts successful export prices. And I'm wondering if you could supply immoderate penetration into what is driving this inclination and what tin we expect going guardant successful position of pricing for exports?

Miguel Galuccio

Well, look, I deliberation first of each arsenic a wide comment, I will opportunity for america nan champion measurement of mitigating section pricing move is to export more, and that is what we scheme to do. I mean we person reached coming 55% of our volumes are exported and that coming represents 65% of our revenue, and we scheme to proceed increasing that export volumes and besides nan export revenue. And you spot already today, nan mitigation of immoderate change erstwhile we decouple of nan export parity that today, thing person nan effect they utilized to person for america successful our equilibrium sheet. And I deliberation this is nan measurement to proceed mitigating nan section marketplace dynamic.

Related to what it will hap this twelvemonth for anybody that person operated successful Argentina is intelligibly that it will beryllium a difficult twelvemonth successful position of dynamics of section prices because what you mentioned is an predetermination year. Nevertheless, nan move ever show that fundamentally freezing prices of gasoline and pesos is not a bully woody for nan country. Today, it's clear that we request to proceed being coupled pinch nan world marketplace and immoderate large decoupling pinch world marketplace extremity up not being bully for nan country, not being bully for nan provinces that person lived from royalties of nan oilfield and neither for america that -- aliases for nan manufacture that extremity up catching investment. That is what is not what Argentina request today. So we're being conservative, arsenic we said successful our scheme successful position of section pricing, section pricing, astir apt much blimpish that we should be. So that is factoring successful our plan. But yes, nan move is going to beryllium reliable this year.

Related to discount -- commercialized discount connected exports, arsenic we mentioned, I mean, we were astatine 8%, past quarter. For us, this is simply a precocious discount and we spot that discount coming down to much 6% and 7% for nan Q1. And nan logic of our commercialized squad is that, that discount is going to proceed going down during nan year. So we expect it to beryllium overmuch little than for nan year. The logic of that, arsenic acold arsenic you know, we usage cargoes of 0.5 cardinal barrels. Those cargoes has been successful precocious request owed to Russia trim disconnected production. But we judge that moreover though Russia is still complicated, it will not beryllium that overmuch successful place, and we activity to spot that successful Q1. So I will opportunity you should see that astir apt that location was a precocious number and we should beryllium much adjacent to 6% aliases 5% this year.

Rodrigo Nistor

It was really clear. And past a speedy follow-up connected nan CapEx for adjacent year. What are nan cardinal factors that Vista would see to accelerate its finance plan, it's a matter of pricing, it's a matter of superior restrictions easing, really would you deliberation -- really is your reasoning process to determine aliases not to ramp up investments?

Miguel Galuccio

For us, I mean, again, arsenic I mentioned before, for 2023, nan main thing, it's a twelvemonth wherever we are going to fulfill nan afloat capacity that we person and nan manufacture have, leaving nan twelvemonth pinch very precocious matter of 60,000 barrels lipid per day, and that is arsenic overmuch arsenic we tin do. Then 2024 is different because pinch OldelVal delivering 40% of nan capacity, that is -- that they are executing today, it will beryllium much of playing really overmuch rate we will make and really overmuch CapEx of that rate we want to pump successful accepted activity. As I said earlier it's not unthinkable that we summation activity to 2 rigs that is going from 30 wells to 40 wells. And past we will person little [CapEx] to put successful facilities. So if you want to model, you tin proceed exemplary successful a mean lawsuit that we will still having a CapEx of astir $600 million, but pinch much activity. Of course, we tin spell further than that. It's not successful nan scheme today, it's not thing that coming we tin opportunity that we will do.

Operator

Thank you. I would now for illustration to move nan convention backmost to Miguel Galuccio for closing remarks.

Miguel Galuccio

Thank you very overmuch for your participation. We are closing a very bully 2022 and starting [2021] pinch a awesome M&A transaction that put Vista successful a amended spot successful position of being afloat unconventional subordinate pinch amended numbers, pinch amended lifting costs, pinch amended margins. And we are looking guardant to execute and present connected our committedness besides successful this 2023. So, convey you very overmuch for participating and looking guardant to spot you again adjacent quarter.

Operator

This concludes today's convention call. Thank you for participating. You whitethorn now disconnect.