Vista builds oil momentum in Argentina, seeks dollars under promotional regime

Upstream firm Vista Energy has secured ample new midstream capacity in Argentina to support growth plans as the company seeks access to dollars under a government investment-promotion regime, CEO Miguel Galuccio said.

For 2026, oil-focused Vista aims to be pumping out at least 80,000boe/d, up from 48,600boe/d in 2022. Guidance for this year is 55,000boe/d, with an exit rate of 60,000boe/d.

Vista's oil production in the fourth quarter was 45,700b/d, up 41% year-on-year. Gas production was 1.35Mm3/d, up 5%.

Vista is Argentina’s third-biggest oil producer after national oil company YPF and Pan American Energy. But it is the second-biggest producer, after YPF, at the Vaca Muerta unconventional hydrocarbons formation, where it is focusing investment. Vista announced it was offloading its conventional assets to Aconcagua Energía. 

“We’re well on track and we believe that we will surpass this [2026] objective that we have set for ourselves,” Galuccio said, citing the importance of pipeline and export terminal investment underway to increase dispatch capacity between the Neuquén basin – home to Vaca Muerta – and Puerto Rosales export facilities in Buenos Aires.

Vista was last year awarded 31,500b/d of capacity on a 2023-24 pipeline expansion project being carried out by concessionaire Oldelval, and 37,400b/d of port throughput capacity linked to an associated Oiltanking terminal expansion project.

The new allocations will take total Vista dispatch capacity to 74,300b/d, the company’s 4Q22 results call was told. 

“We will have enough capacity to execute our plan, basically,” said Galuccio.

Mexico-listed Vista is exporting around half of the oil it produces, partly spurred by favorable export prices of around US$74/b in Q4, compared with roughly US$63/b obtained in the domestic market. The local barrel price results from agreements reached by the government, refiners and producers, the latter urging export parity prices. With 2023 an election year, local pump prices would be unlikely to undergo any significant increase.

An Argentina-Chile oil export pipeline is also being brought back online.

Vista will continue pressing the export accelerator, Galuccio said.

ACCESS TO DOLLARS, OUTLOOK

Galuccio said the company had filed a request with the government to access US$36mn under a scheme – via decree 277 of 2022 – that allows producers to exchange for dollars a proportion of revenue obtained from a portion of additional output.

Vista officials are waiting for the federal energy department to issue an associated certificate, the call was told. 

Supporting the decree, which has the requisite complementary regulations in place, Galuccio said: “That is what we have to keep pushing and it’s a decree that's basically good for the industry and, I think, good for the country.”

Galuccio forecast that, after this year's presidential election in Q4, a “new economic regime” may be in place and new incentive measures may follow.

Citing the role of Vaca Muerta in generating dollars for the country, he said: “To access US dollars we need to continue investment and we need to continue growing production in order to create more export volumes; I think this is very clear across the board.

“I am positive that, whatever happens after the election, that will be very high on the agenda of the new government.”

CAPEX

Capex guidance for 2023 is up 11% to US$600mn, with roughly US$140mn earmarked for treatment plant work and US$380mn in new Vaca Muerta wells in its plan.

“We need to invest in facilities,” Galuccio said. “We have to upgrade our capacity in order to fulfill our 2026 plan.”

In the subsequent years, investment in facilities should taper off and drilling work could accelerate if the right market conditions are there, he added.

In Mexico, the company plans to ramp up capex, which was US$5mn, to "drill a few wells."

VACA MUERTA FOCUS

The deal with Aconcagua allows the company to focus chiefly on hydrocarbons operations at the Vaca Muerta formation, home to key areas Bajada del Palo Oeste and Aguada Federal, and reduce lifting costs. Vista is also carrying out pilot work at Bajada del Palo Este and Aguila Mora.

As part of the transaction, Vista maintains a right to 40% of oil and gas production from the conventionals areas.

Galuccio said strong cash flow would allow the company to keep up its M&A focus.

“We’re always looking at how we can improve our numbers,” he said.

BOTTOM LINE

Vista posted net income of US$75.5mn for the quarter, up 39.9% year-on-year, as revenue climbed 57% to US$308mn. 

For the whole year, the company reported net income of US$270mn, up 219%, as revenue rose 75% to US$1.14bn, it said in a results statement.