Vista Energy S.A.B. de C.V. 2026 Q3 Earnings Call

Please proceed. 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.

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.

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.