Vista Energy(US:VIST)2022-07-28 01:08Financial Data and Key Metrics Changes - Total production averaged 44,800 boes per day, a 12% increase year-over-year [9] - Total revenue in Q2 2022 was $294.3 million, a 78% increase compared to Q2 2021 [10] - Adjusted EBITDA reached $202.1 million, doubling year-over-year, with a margin of 69% [11][21] - Adjusted net income was $82.3 million, implying a quarterly adjusted EPS of $0.9 per share [11][31] - Net leverage ratio at quarter end was 0.6x adjusted EBITDA [26] Business Line Data and Key Metrics Changes - Oil production increased by 70% year-over-year, driven by strong performance in Bajada del Palo Oeste [9][12] - Total shale oil production now represents 74% of total oil production [12] - Realized oil price averaged $78.4 per barrel, up 43% year-over-year [17] - Realized gas prices increased 11% year-over-year to $3.9 per million BTU [19] Market Data and Key Metrics Changes - Sales to export markets accounted for 42% of oil volumes and 53% of oil revenues [18] - The average realized oil price for the second half of the year is forecasted at $73 per barrel [30] - The company expects to maintain export levels consistent with Q3 for Q4 [42] Company Strategy and Development Direction - The company is increasing its annual guidance from 24 to 32 new well tie-ins for the year [16][28] - Plans to maintain lifting costs at $7.5 per barrel for the year despite inflationary pressures [20][29] - The company is focused on carbon footprint reduction projects, aiming for a 25% reduction in greenhouse gas emissions intensity in 2022 [26][33] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in maintaining lifting cost guidance despite inflation and production growth [40] - The company is optimistic about production growth in the second half of the year, which is expected to dilute fixed costs [29] - Management noted that the local market is fully supplied, and export approvals are expected to proceed without significant delays [47] Other Important Information - Capital expenditure for the quarter was $151.4 million, primarily for drilling and completion activities [10][23] - The company executed a share buyback program, purchasing a total of 2.8 million shares [34] - The company is planning to repay a $50 million bullet bond maturing on August 8, which will reduce gross debt to approximately $528 million [25][30] Q&A Session Summary Question: What strategies is the company pursuing to deal with rising prices? - Management acknowledged cost pressures but maintained guidance of $7.5 per barrel, expecting production growth to dilute costs [40][41] Question: What should be expected in terms of exports as a percentage of total sales? - Management forecasted three cargos for Q3 and maintained similar export levels for Q4, with an average realized price of $73 per barrel [42][44] Question: How is the company seeing export approvals? - Management indicated that there have been no significant issues with export permit approvals, and the local market is fully supplied [47] Question: How does the company view its long-term plan now? - Management noted that they are ahead of guidance and are considering increasing activity based on favorable oil prices [48] Question: What is the balance between leveraging and returning cash to shareholders? - Management stated that returning cash to shareholders is a priority, with buybacks and dividends being considered for the future [59][61] Question: Are there any issues with completion activity due to maintenance? - Management confirmed that there are no issues with pump maintenance and that they have strategic partnerships with service providers [76][78] Question: How is the company addressing inflation in CapEx? - Management mentioned long-term contracts as a mitigator against inflation and highlighted ongoing cost-saving initiatives [84][85] Question: What drove the significant drop in production in Aguada Federal? - Management explained that the drop was due to a normal protocol to avoid water heat during fracking, and production levels are expected to normalize [88][89]