Good day, and thank you for standing by. Welcome to the Vista's Fourth Quarter 2022 Earnings and Full Year Webcast Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Alejandro Chernacov. Please go ahead.

Thanks. Good morning, everyone. We are happy to welcome you to Vista's Fourth Quarter and Full Year 2022 Results Conference Call. I am here with Miguel Galuccio, Vista's Chairman and CEO; Pablo Vera Pinto, Vista's CFO; and Juan Garoby, Vista's COO. Before we begin, I would like to draw your attention to our cautionary statements 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 expectations contemplated by these remarks. Our financial figures are stated in U.S. dollars 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. Reconciliation of these measures to the closest IFRS measure can be found in our earnings release that was issued yesterday. Please check our website for further information. Our company, Vista is a [Foreign Language] capital variable organized under the laws of Mexico, registered in Bolsa Mexicana de Valores and the New York Stock change. The ticker of our common stock are VISTAA in the Bolsa Mexicana de Valores, VIST in the New York Stock Exchange. And the ticker of our warrant is VTW408A. I will now turn the call over to Miguel.

Thanks, Ale. Good morning, everyone. Today, I will share with you the fourth quarter and full year results of 2022 in which we have continued to deliver a strong operational and financial performance. First, I will present the fourth quarter results and then we later move on to full year results and 2023 guidance, and I will also comment on the transaction we closed and announced yesterday. During Q4, 2022, total production averaged [54,700] BOE per day, a 33% increase year-over-year. Oil production was up 41% year-over-year driven by the tie-in of 1 4-well pad in Bajada del Palo Oeste and another in Aguada Federal. Total revenues were $308 million for the quarter, an interannual increase of 57% driven by higher production and stronger realized oil price. Lifting costs per BOE was $7.2 for the quarter, reflecting our success in containing cost pressure through a number of efficiency measures as well as dilution in the fixed costs through incremental production volumes. Capital expenditure was $145 million including the drilling of 8 wells and the completion of 7 wells during the quarter. Adjusted EBITDA during Q4 2022 was $202 million, a 73% increase year-over-year, driven by higher production and realization prices and lower lifting costs per BOE. During Q4 2022, we record positive free cash flow of $57 million, driven by robust adjusted EBITDA generation. Net leverage ratio at quarter end was 0.4x adjusted EBITDA. Adjusted net income was a solid $171 million including and not recurring positive adjusted of $98 million of income tax, implying a quarterly adjusted EPS of $2 per share. We will now deep dive into our main operation and financial metrics for the quarter. Total production during Q4 2022 was 54,700 BOEs per day, up 33% interannually and 8% sequentially. Oil production was up 41% year-over-year,…

[Operator Instructions] Our first question comes from the line of Alejandro Demichelis from Nau Securities.

Congratulations on the deal. Miguel, quick question. You just mentioned that you see potential to overdeliver on the 2026 target. So could you kind of walk us how you are seeing those targets now because you're lowering your cash cost, you're reducing your emissions significantly through the sale, you're having more money in the bank, you're having evacuation capacity. So how much more can you overdeliver? Or can you bring those targets forward rapidly?

Yes, I mean we -- if you remember, for 2026, we basically guide that we were going to be around 80,000 barrel per day and USD1.1 billion of EBITDA, and we are well on track. And as I said in the presentation, we believe that we will surpass that objective that we put ourselves. When you look at 2023, our guidance already in term of EBITDA is between USD850 million and USD900 million. So with that, I think we will be well ahead. Other thing to consider on the plan that we present December 2021. We -- our commodity price at that time was at [$60] and today we are running with higher commodity price. So that also will help. Regard activity, of course, I mean this year, our plan is to fully utilize the capacity that we have. We will be running with [1.5 rig] with a CapEx of around $600 million, part of that CapEx. So important part of that CapEx is going to be dedicated to facilities. In 2024, of course, also we can shift some of that CapEx to having additional activity in term of more drilling. We could move from [1.5 drilling rig to 2 drilling rig]. You see the contact is still the 1 that we have today, that we believe that could be the case. So cutting the long story short, I think we are well ahead to deliver what we set for 2026, and you should expect that we will surpass our production and also the EBITDA target that we put in the investor call.

That's great. And as a small follow-up, how are you thinking about those cash returns that you mentioned to shareholders with a new setup?

The cash return still in place is something that we keep into mind. This year will be a particular year because we will invest in a lot in facilities for the future growth. Now 2024 from the cash point of view, it could be -- I mean, by plan, it look to be a very good year. And returning cash to shareholder or returning to shareholder is something that we keep in mind. Remember, we have a buyback program that we are executing that was approved last December. We have $20 million to execute of that buyback program that for us is one of the way of returning to shareholders that continue in place and we will continue executing that.

Our next question comes from the line of Regis Cardoso from Credit Suisse.

Miguel, Alejandro, congratulations on the deals on the very strong results. My question really is a discussion on, connects very well with the previous question. Now with the good results you've had, but still with the constrained capital flow restrictions in Argentina, I wanted to get a sense of what you think is necessary or what would be a good arrangement that Argentina could implement to foster the investments and to allow the oil companies to remunerate their shareholders? I mean, in the past, we've talked about retaining some of the dollar from exports, for example. So I'm asking this now, Miguel basically because you've now again, divested an asset looks at very attractive valuation, but it looks like you're generating a lot of liquidity in the company, right? So the question really is what can be done with that liquidity?

Yes, you're completely right, and we have the same target. Let me set first, I mean, one of things that we have in hand today is the decree to [7.7]. I think our main objective is that this decree that was put in place and was fully regulated by the government. So that means that they have fulfilled all the process that they have to -- they will have to put in place in order for the decree to be operational. It's already fulfilled from the government side. It's also fulfilled from our side. We have presented everything and basically today, we have a first claim of $36 million that is in place and we are waiting for the Minister of Energy, basically to release the certificate of that claim that we have done, okay. So I will say that is what we have to keep pushing. And if a decree that was put in place, that basically is good for the industry, and I think good for the country, since all that money today is result of investment. And it's the first thing we need to focus on. Second, I would like to comment, in terms of CapEx. The 2023 is a year where most of the CapEx -- most of the cash that we generate, it will be translated to CapEx, because we need to invest in facilities because it's a moment that we have to upgrade our capacity in order to fulfill the plan that we have to 2026. 2024 is a year where we have a strong cash generation and not that investment in facilities. Therefore, for that to have that decree and probably other things that could come, I expect it will come from a new economic regime due to the election that we will have this year, I think will be in place. Between most of the parties, some politicians today, besides -- I mean, in comparison where we have probably 4 or 5 years ago, Vaca Muerta is the key for the country to access to U.S. dollar and to access to that U.S. dollar, we need to continue investing and we need to continue growing the production in order to create more export volume. I think this is very clear across the board. So I'm positive that whatever happened after the election, that will be part of something that will be very high in the agenda in the new government, okay? So I don't think I can tell you more than that. Concrete the decree to 7.7 . And then of course we are hopefully that we can do even better than that.

Our next question comes from the line of Andres Cardona from Citi.

Congratulations on the very strong results in 2022, not only on the financial front, but also on the reserves and even on the locking value strategies. Let me start from that last idea. You have been very active on the M&A front. Do you see more room to do something else in 2023, maybe farm out some working interest at Vaca Muerta [Indiscernible] to accelerate development or something else? And the second question is with such a low leverage and strong cash flow, what is holding you back to accelerate the development of the projects? Is it something about, I don't know if facilities. It's our company policy to work on a new trial cash flow basis. So just wanted to understand what is holding you back from accelerate on the production front?

And I will start from the second question. As you know, today, in 2023, we have a plan that basically is same to fulfill the old capacity that we have. And that old capacity, we are going to fulfill it because we are going to be exiting 2023 with 60,000 BOEs, okay, that will allow us to use every single piece of capacity that we have in our facilities and also in the main pipeline that connects with export port in Bahia Blanca. Going forward, as I mentioned before, I mean what we see is that 40% of the capacity that Bahia is going to create, is going to be deliver in 2024 and the rest 60% of that additional capacity is going to be released in 2025. That will allow us to grow further. And to grow further, I mean, in 2024, what today we can think of, is to probably add 0.5-rig. So to go to a 2-rig program that will take us from 30 wells primarily to 40 wells. But keeping in mind that we always have been in our program, the cash flow generation. This is something that we are always looking at. We basically are aiming to generate cash and to return part of that to our shareholders. And again, I mean when we don't have additional capacity, the dynamics as we present in our Investor Day, it will be related to how much cash we generate, how much we want to pump into additional activity, and how much we want to return to our shareholders. And of course you see because you run the numbers, that cash generation is going to be so reached that we also have the freedom to continue looking an M&A transactions. So far, what we have done has been very focused on increasing acreage in Vaca Muerta, where we have done very well with the acquisition of Aguada Federal, not only from the economical point of view because we bought core acreage at a very good rate. But also as the business development team execute this quarter and the transaction that helps us to be a pure player in Vaca Muerta with a very focused organization, reducing our lifting costs and increasing our margins, okay. So again, nothing that you should expect from the M&A point of view, but we always -- we did so far looking to how we can improve our numbers and our returns in our margins.

Our next question comes from the line of Walter Chiarvesio from Santander.

Congratulations for the results. I would like to ask you if you have a more specific breakdown on the CapEx, specifically, the $600 million CapEx, especially between what is facilities this year, what is the direct investment in production [Technical Difficulty]. That is my first question. And the second, to make clear is, you are investing in the OldelVal expansion and you're awarded 31,500 barrels per day with this new expansion. But you mentioned in the presentation that you have a total capacity of 34,300 barrels per day. The difference between this 31,000 and the 34,000 is already [Technical Difficulty] something that you have secured? Or is it something that is down year-over-year? Those are my questions.

So let me give you first a breakdown of the CapEx and hopefully that became more clear to you. So just to give you the breakdown first of 2022 as a baseline to compare with '22 and '23. We basically, in 2022, we spent $360 million in Vaca Muerta wells, around $100 million in facilities, there was around USD60 million in others and USD5 million in Mexico. We spent around $540 million in total CapEx. This CapEx is increasing to $600 million in 2023, mainly due to facilities. So when you look at the CapEx in 2023, it's going to be $380 million in Vaca Muerta wells, the 20 new wells that we put in our plan. Now facilities are from around $100 million to $140 million, that basically includes an upgrade of the 3 main facilities, gathering facilities,compression facilities. So everything that we need to increase our capacity to basically everything that we need to deliver a plan that we put together for 2026. So our capacity in Entre Lomas for example is going to go all the way up to 80,000 barrels of oil per day. So that is a big update. The rest on -- is still the same. And we will see -- we also will see because we will increase the activity in Mexico. In Mexico last year we invested $5 million. This year, we will drill few wells, so that go to $80 million. But main increase in CapEx is related to facilities, and in order to be ready to be prepared for 80,000 BOE that we have in the Investor Day. The other question was related to OldelVal. So OldelVal project is a project that will add capacity to the industry of 350,000 barrel oil per day of evacuation capacity on the top that we have today. It's a project that it would require a CapEx of $1.1 billion. And Vista was awarded 10% of that capacity, okay. That project for us in term of CapEx required an investment of $118 million, that is going to pay in 3 installments of $54 million in 2023, $10 million in 2024 -- no, USD54 million in 2024 and USD10 million in 2025. And I have -- I know and in tariffs of $0.6 per barrel. So what you should expect in terms of capacity -- additional capacity for us is 31,000 barrels of oil per day.

All right. But the total contracted capacity is 34,000, okay. Is that correct?

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

Okay. Perfect. Understood.

So with that we will be -- we will have enough capacity to execute our plan basically.

Perfect. And the follow-up question. If -- how we should see -- you mentioned that the CapEx [Technical Difficulty] be reduced in 2024, because you are not investing much in facilities. What would be the number that we should model -- in our model?

You cut off, could you repeat the question?

I mean, you mentioned that 2023 is going to be like a high CapEx year $600 million, but in 2024 CapEx, especially facilities should be lower. So how much would be the CapEx for 2024? Or assuming that you'd have similar numbers of wells, et cetera? I mean, it should be lower.

Yes, if I was you, I would play. So clearly facility is going to go down from today, it's $140 million, $150 million to more close to $100 million, 2024 and further down in 2025, we said $50 million, $60 million. Now then you have to play with the fact that what we doing to in terms of acceleration of drilling activity, it is possible that we accelerate as I said before to move from 1.5 rig to 2 rigs. And that it could bring a bit of extra CapEx to the development side of the CapEx. So for example, it's not unthinkable that in 2024, even though we spent $40 million or $50 million less on facilities, we transfer that CapEx into wells, because we want to accelerate our program. If the commodity prices still are the way that it is today and with the performance that we are having, with the portfolio that we have and with the development cost and lifting costs that we have, it could be reasonable that we want to accelerate.

Our next question comes from the line of Rodrigo Nistor from Latin Securities.

Congratulations on the strong resources quarter. I'm curious about the potential impact of the upcoming election here on domestic prices and how Vista plans to navigate any potential fluctuations? And then additionally, I noticed that there have been some recent discounts in export prices. And I'm wondering if you could provide some insight into what is driving this trend and what can we expect going forward in terms of pricing for exports?

Well, look, I think first of all as a general comment, I will say for us the best way of mitigating local pricing dynamic is to export more, and that is what we plan to do. I mean we have reached today 55% of our volumes are exported and that today represents 65% of our revenue, and we plan to continue growing that export volumes and also the export revenue. And you see already today, the mitigation of any fluctuation when we decouple of the export parity that today, nothing have the impact they used to have for us in our balance sheet. And I think this is the way to continue mitigating the local market dynamic. Related to what it will happen this year for anybody that have operated in Argentina is clearly that it will be a difficult year in terms of dynamics of local prices because what you mentioned is an election year. Nevertheless, the dynamic always show that basically freezing prices of gasoline and pesos is not a good deal for the country. Today, it's clear that we need to continue being coupled with the international market and any big decoupling with international market end up not being good for the country, not being good for the provinces that have lived from royalties of the oilfield and neither for us that -- or for the industry that end up catching investment. That is what is not what Argentina need today. So we're being conservative, as we said in our plan in terms of local pricing, local pricing, probably more conservative that we should be. So that is factoring in our plan. But yes, the dynamic is going to be tough this year. Related to discount -- commercial discount on exports, as we mentioned, I mean, we were at 8%, last quarter. For us, this is a high discount and we see that discount coming down to more 6% and 7% for the Q1. And the reason of our commercial team is that, that discount is going to continue going down during the year. So we expect it to be much lower than for the year. The reason of that, as far as you know, we use cargoes of 0.5 million barrels. Those cargoes has been in high demand due to Russia cut off production. But we believe that even though Russia is still complicated, it will not be that much in place, and we seek to see that in Q1. So I will say you should consider that probably that there was a high number and we should be more close to 6% or 5% this year.

It was really clear. And then a quick follow-up on the CapEx for next year. What are the key factors that Vista would consider to accelerate its investment plan, it's a matter of pricing, it's a matter of capital restrictions easing, how would you think -- how is your thinking process to decide or not to ramp up investments?

For us, I mean, again, as I mentioned before, for 2023, the main thing, it's a year where we are going to fulfill the full capacity that we have and the industry have, leaving the year with very high matter of 60,000 barrels oil per day, and that is as much as we can do. Then 2024 is different because with OldelVal delivering 40% of the capacity, that is -- that they are executing today, it will be more of playing how much cash we will generate and how much CapEx of that cash we want to pump in traditional activity. As I said before it's not unthinkable that we increase activity to 2 rigs that is going from 30 wells to 40 wells. And then we will have less [CapEx] to invest in facilities. So if you want to model, you can continue model in a medium case that we will still having a CapEx of around $600 million, but with more activity. Of course, we can go further than that. It's not in the plan today, it's not something that today we can say that we will do.

Thank you. I would now like to turn the conference back to Miguel Galuccio for closing remarks.

Thank you very much for your participation. We are closing a very good 2022 and starting [2021] with a great M&A transaction that put Vista in a better place in terms of being fully unconventional player with better numbers, with better lifting costs, with better margins. And we are looking forward to execute and deliver on our promise also in this 2023. So, thank you very much for participating and looking forward to see you again next quarter.

This concludes today's conference call. Thank you for participating. You may now disconnect.