Vista Energy (VIST) Q3 2026 Earnings Call Transcript

DATE

Thursday, Oct. 29, 2026

CALL PARTICIPANTS

• Strategic Planning and IRO - Alejandro Cherñacov
• Chairman and Chief Executive Officer - Miguel Galuccio
• Chief Financial Officer - Pablo Vera Pinto
• Chief Technology Officer - Juan Garoby
• Chief Operating Officer - Matías Weissel

TAKEAWAYS

• Total Production -- 169,000 barrels of oil equivalent (BOE) per day, representing 33% growth year over year driven by organic expansion and asset consolidation.
• Oil Production -- 147,000 barrels per day, an increase of 34% compared to the previous year.
• Total Revenue -- $1.23 billion, reflecting 75% growth year over year due to increased production and higher realized prices.
• Adjusted EBITDA -- $841 million, an increase of 78% year over year supported by revenue expansion and stable unit costs.
• Free Cash Flow -- $334 million, driven by strong adjusted EBITDA generation during the quarter.
• Net Income -- $293 million, significantly higher than the adjusted $27 million reported in the third quarter of 2025.
• Earnings Per Share -- $2.60 for the quarter.
• Lifting Cost -- $4.70 per BOE, an increase of 6% year over year reflecting inflationary pressure on peso-denominated services.
• Net Leverage Ratio -- 1.12 times adjusted EBITDA, or 1.04 times on a pro forma basis, marking a reduction from 1.41 times in the prior quarter.
• Realized Oil Price -- $84.20 per barrel, representing a 6% sequential decrease following lower Brent prices.
• Oil Export Revenue -- $935 million, representing 73% of total oil sales volume.
• Capital Expenditure -- $460 million, which remained flat on a sequential basis.
• Cash Position -- $775 million at the end of the third quarter.
• Adjusted EBITDA Margin -- 68%, an expansion of 1 percentage point compared to the third quarter of 2025.
• 2026 Production Guidance -- 158,000 BOE per day, with management confirming they are on track to meet this target.
• 2027 Production Guidance -- 185,000 BOE per day, reiterated by management following strong performance in September.
• 2027 Adjusted EBITDA Guidance -- $3.3 billion, assuming a Brent price of $80.00 per barrel.
• Pipeline Capacity -- 180,000 barrels per day, including approximately 20% spare capacity available to the company.
• Share Buybacks -- $55 million executed during the quarter under a $150 million approved annual plan.
• Operating Cash Flow -- $773 million, which included a $50 million income tax payment.
• New Well Connections -- 25 wells connected during the quarter, maintaining a run rate of 100 wells per year.

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RISKS

• Galuccio stated, "lifting cost was $4.7 per BOE, an increase of 6% compared to the previous year. This reflects the impact of inflation on peso-denominated goods and services amid flat FX rates," highlighting cost pressures from the local macroeconomic environment.
• Galuccio noted that realized oil prices were "6% below the previous quarter," driven primarily by the decrease in average Brent prices from $97 to $91 per barrel.

SUMMARY

Vista Energy, S.A.B. de C.V. (NYSE:VIST) reported record quarterly production volumes driven by organic growth and the full consolidation of Bandurria Sur and Bajo del Toro. Management stated that total production rose 33% year over year, contributing to higher adjusted EBITDA and free cash flow generation. The company maintained its production targets for the current and upcoming fiscal years while noting that infrastructure capacity remains sufficient for planned expansion. Management reported that the balance sheet was strengthened through debt repayment and share buybacks while leverage ratios improved toward a year-end target of one times adjusted EBITDA.

• The company is evaluating an acceleration of the Bandurria Norte project: CEO Galuccio stated, "Assuming the RIGI application get approved, we will bring the project forward from 2029 to next year."
• Infrastructure development for the VMOS pipeline remains on schedule: CEO Galuccio stated, "VMOS mechanical completion is scheduled for the end of the year. We will start filling the pipeline in Q1, and you can expect that we have commercial operation scheduled for the first semester."
• Management identified potential inventory upside from untested landing zones: COO Weissel noted that "Typically, you would expect upsides being reflected in the well inventory as you continue drilling and testing" as the company moves upward from the deepest organic zones.
• The company maintained its pricing strategy by selling 100% of volumes at export parity prices both domestically and internationally.
• Pinto indicated that the company is not currently involved in active M&A processes while remaining alert for opportunistic deals that could generate incremental value.

INDUSTRY GLOSSARY

• BOE: Barrels of oil equivalent, a unit of energy used to combine oil and natural gas production into a single measure.
• Vaca Muerta: A major shale formation in Argentina where the company's primary exploration and production assets are located.
• RIGI: A regulatory incentive regime for large-scale investment projects in Argentina designed to accelerate capital deployment.
• VMOS: The Vaca Muerta Oil Sur pipeline project, intended to increase regional export capacity.
• Drag Reduction Agents: Specialized chemical additives used to increase the flow capacity and efficiency of pipelines.
• Export Parity: A pricing model where domestic oil prices are aligned with the prices realized in the international export market.
• Ship-or-pay: A contractual agreement requiring a company to pay for pipeline capacity regardless of the actual volume transported.

Full Conference Call Transcript

Operator: 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 one on your telephone. You will then hear a message advising your hand is raised. To withdraw your question, please press star 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 Cherñacov. Please proceed.

Alejandro Cherñacov: Thanks. Good morning, everyone. We are happy to welcome you to Vista's third quarter of 2026 results conference call. I am here with Miguel Galuccio, Vista's Chairman and CEO, Pablo Vera Pinto, Vista's CFO, Juan Garoby, Vista's CTO, and Matías Weissel, Vista's COO. Before we begin, I would like to draw your attention to a cautionary statement on slide 2. 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 the expectations contemplated by these remarks. Our financial figures are stated in USD and in accordance with International Financial Reporting Standards, IFRS.

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% non-controlling interest in Bandurria Sur Participaciones S.A., holder of 30% non-operated working interest in Bandurria Sur block, of which 25.1% 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 VIST in the New York Stock Exchange. I will now turn the call over to Miguel.

Miguel Galuccio: 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 growth and the full consolidation of Equinor asset led to a record quarterly production. Combined with strong oil realization prices and focus on cost efficiency, this led to a solid adjusted EBITDA and free cash flow generation during the quarter. Total production was 169,000 BOE per day, 33% above previous year. Oil production was 147,000 barrels per day, up 34% vis-à-vis the previous year. Total revenues during the quarter were $1.23 billion, an outstanding growth of 75% compared with Q3 2025. Lifting cost was $4.7 per BOE, 6% above the previous year.

Capital expenditure was $460 million, sequentially flat. Adjusted EBITDA 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. Earnings per share were $2.6 during the quarter. Free cash flow was $334 million, mostly as a consequence of the significant boost in adjusted EBITDA generation. Finally, our net leverage ratio at quarter end was 1.12 times adjusted EBITDA. On a pro forma basis reflecting LTM figures for the acquired asset, the ratio was 1.04 times adjusted EBITDA, 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% and sequential increase of 8%. We connected 25 new wells during the quarter, currently running operation at a run rate of 100 wells per year. The cumulative 19 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 147,100 barrels per day, 34% higher year-over-year and 9% above the previous quarter. Gas production increased 29% on an interannual basis and 8% sequentially. Total revenues during Q3 were $1.23 billion, a material growth of 75% 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%, driven by higher production, which offset lower oil realization prices. Oil exports increased 56% year-over-year, reaching 9.9 million barrels in the quarter, representing 73% of our oil sales volume. During the quarter, exports reached $935 million. Realized oil prices were $84.2 per barrel, 30% above Q3 2025, and 6% 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 peso-denominated goods and services amid flat FX rates. Selling expenses were $3.6 per BOE, a 14% decrease year-over-year, mainly driven by the dilution of a ship or pay cost on a per barrel basis in the Duplicar pipeline as we continue to ramp up production volumes.

During Q3, adjusted EBITDA was $841 million, 78% higher interannually, driven by a strong expansion of revenues amid flat unit costs. On a sequential basis, adjusted EBITDA increased 4% as production growth offset lower realized oil prices. Adjusted EBITDA margin was 68%, an expansion of 1 percentage point compared to the same quarter of last year. Similarly, adjusted EBITDA 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 $479 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 cash 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 last 12 months of adjusted EBITDA for the acquired asset, net leverage ratio was 1.04 times at quarter end, improving from 1.25 times in the 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 a 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 EBITDA and free cash flow generation.

This allow 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 investor for their continued support. Operator, we can now move to Q&A.

Operator: Thank you so much. As a reminder, to ask a question, simply press star one on your telephone and wait for your name to be announced. To withdraw your question, press star one again. Our first question comes from the line of Milene Carvalho with J.P. Morgan. Please proceed.

Milene Carvalho: Good morning, everyone. Congrats on the results, and thank you very much for the opportunity to make my question here. Vista has delivered solid production growth in 2026, and we saw the company delivering 152,000 barrels per day in September. 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? If you could also touch on how is the latest status on the progress of VMOS project. There could be a delay, and what would be the implications for Vista here? Thank you very much.

Miguel Galuccio: Hi, Milene. Thank you for your question. Yes, as you mentioned, in September, our production was 152,000 barrels per day. Our current pipeline capacity is at 180,000 barrels per day, and let me give you a bit of detail on that. 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 Oldelval, 72,000 to Duplicar, and 32,000 to Vaca Muerta Norte. This pipeline capacity includes 33,000 of drag reduction agents, which at the moment, what we have made public in our materials is only 9,000 of that.

But we feel at this time comfortable or confident that really we can add another 24,000 due to drag reduction agents. Related to Duplicar, we also have fine-tuned what is Duplicar or developed open access after the Equinor acquisition. With that, we have added around 2,000 barrels per day capacity to what we have mentioned before. Two last points on VMOS. VMOS mechanical completion is scheduled for the end of the year. We will start filling the pipeline in Q1, and you can expect that we have commercial operation scheduled for the first semester. Initially, we have 80,000 pipeline capacity, and we will not get the full amount during the first semester.

You have to expect the 50,000 really will come in the second semester. In short, we don't see any bottleneck for our growth plan at the moment. Thank you for the question, Milene.

Milene Carvalho: Perfect. Thank you very much.

Operator: Thank you. Our next question is from Leonardo Marcondes with Bank of America. Please proceed.

Leonardo Marcondes: Hello, everyone. Thank you for taking my questions. I have one, actually. With leverage now at very comfortable levels, do you still see room for further M&A in Argentina? Thank you very much.

Miguel Galuccio: Thank you, Leo, for your question. Taking advantage that I'm short of voice and we have the full team connected, I will pass this question to Pablo Vera Pinto.

Pablo Vera Pinto: Thank you, Miguel. 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. 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 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.

Leonardo Marcondes: That's perfect. Thank you, guys.

Operator: Thank you. Our next question comes from Bruno Montanari with Morgan Stanley. Please proceed.

Bruno Montanari: 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. I was wondering how have those tests evolved, and what we should think about the potential production upside from that initiative. Thank you very much.

Miguel Galuccio: Thank you, Bruno. Very good question. I will pass this one to Matías Weissel, the COO of Vista.

Matías Weissel: 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. Just to give you some color, in Bajada del Palo Este, we haven't tested the upper carbonates yet. If you consider the neighboring blocks, like Bandurria Sur and La Amarga Chica, they are currently developing more landing zones. That makes sense because these are all the blocks in fulfill development for a longer time than Bajada del Palo Este.

Adding some color, in Bajada del Palo Este, we are also studying the Orgánico that we know is present at least in the western part of the block, close to Bajada del Palo Oeste. Adding to that, in Águila 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 neighboring areas and activity, for example, Bajo del Choique and Bajo del Toro.

To give you some sense of potential of this upside here, in Bajo del Toro, at our well interest, we have 146 wells in the inventory with 14,000 acres, and in Águila Mora, we have 21,000 acres, but only with 100 wells in the inventory. We are looking forward to that. Overall, the way that we develop our assets is progressive, as a shale play. If you are in an area 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. That is the reason why we start moving upwards.

Typically, you would expect upsides being reflected in the well inventory as you continue drilling and testing. I am quite confident that you will see more wells added to inventory in the next years for the company.

Bruno Montanari: Got it. Thank you very much.

Operator: Thank you. Our next question comes from Alejandro Demichelis with Jefferies. Please proceed.

Alejandro Demichelis: Yes, good morning. Thank you very much for taking my question. The question is, how are you looking at 2027, given where oil prices are, given that you have the RIGI kind of projects that have been submitting and also how you're thinking about CapEx for next year, please?

Miguel Galuccio: 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 flat in October and November. Of course, this is a very good starting point for 2027, so we are reinforcing our 185,000 barrel per day production guidance at this time. Regarding adjusted EBITDA, assuming Brent 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 Brent or differential, leads to a delta of $45 million to $50 million of adjusted EBITDA. 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 above. Additional activity will be mostly related to Bandurria Norte. Assuming the RIGI application get approved, we will bring the project forward from 2029 to next year. I plan to give you a full update on these topics in Q4 earnings, in February.

Alejandro Demichelis: That's very clear. Thank you.

Operator: Thank you. Our next question comes from the line of Tasso Vasconcellos with UBS. Please proceed.

Tasso Vasconcellos: Hi, Miguel. Pablo Restrepo of the team. I think it is 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 is quite above the initial expectations, given the current oil environment. 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 discussion a little bit, the CapEx for next year.

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, two, or three years ahead? Thank you.

Miguel Galuccio: Thank you, Tasso. Very good question, and I will probably answer looking two years ahead. 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 buyback. We have an approved plan of $150 million this year, of which we have already executed 55. We have pending $95 million. We expect free cash flow to be positive in Q4, so we will continue building up our-

Operator: Please stand by. We are experiencing some audio difficulties from the line of Miguel.

Alejandro Cherñacov: I will continue with the answer, Carmen.

Operator: Thank you.

Alejandro Cherñacov: Hi, Tasso. This is Alejandro. How are you all? As Miguel was saying, this year we had a $150 million approved plan, where $55 million were already executed during Q3. We still have $95 million pending for the year. 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. We should be thinking that following next year, back to Miguel's answer to a previous question, you are going to be able to increase some of the CapEx linked to the RIGI project of Bandurria Norte that we're bringing forward from 2029 until now.

We might have additional cash flow and the cash that we build this year to probably continue next year, probably with a larger buyback than the one that we actually have this year. We should expect a larger buyback this year coming from a strong cash flow generated in 2026. When you think of 2027 and 2028, as we disclosed in the previous plan, part of it, we could do some acceleration of CapEx linked to RIGI, but also, we could continue deleveraging and adding additional buybacks or some kind of return to shareholders where 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.

With that one, Tasso, probably I will pause and let me know if that covered the answer.

Tasso Vasconcellos: It does. Very clear. Thank you, Ale.

Operator: Thank you so much. One moment for our last question, and it comes from Daniel Guardiola with BTG Pactual. Please proceed.

Daniel Guardiola: Hi. 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? In the same sense, I would like to know 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?

Miguel Galuccio: Thanks, Daniel. I'm back. We were disconnected. Production in Q3 was 159,000 BOE per day, driven by BPO, BPE, Bandurria Sur, and Bajo del Toro with very strong September. I would say considering this 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 barrel oil per day. I think you can take now that this 170 could be about 175. Okay? We are very well positioned to deliver what we say we will deliver. This implies that we 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 barrel oil per day guidance for 2027. For 2027, we expect a similar quarterly dynamic or 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 a bottleneck for us. Also, we mentioned that we may add one drilling rig next year based on the RIGI approval. This is pretty much what I can tell you right now, Daniel.

Daniel Guardiola: Thank you, Miguel.

Miguel Galuccio: You are very welcome.

Operator: Thank you. This will conclude our Q&A session, and I will turn it back to you, Miguel, for final comments.

Miguel Galuccio: 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 Neuquén that have done an outstanding job, really bringing this growth. Thank you very much again, and have a very good day, everybody.

Operator: Thank you. This will conclude our conference. Thank you for participating, and you may now disconnect.

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