Operator: Good day, everyone, and thank you for standing by. Welcome to VISTA's second quarter 2026 earnings webcast. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question, you will need to press star 1-1 on your telephone. You will then hear a message advising your hand is raised. To withdraw your question, please press star 1-1 again. Please be advised that today's conference is being recorded. Now it's my pleasure to hand the conference to VISTA's Strategic Planning and Investor Relations Officer, Alejandro Chernacov. Please proceed.
Alejandro Chernacov: Thanks. Good morning, everyone. We are happy to welcome you to VISTA's second quarter of 2026 results conference call. I am here with Miguel Galuccio, VISTA's chairman and CEO, Pablo Vera Pinto, VISTA's CFO, Vista CTO, and Matias Weissel Vista COO. Before we begin, I would like to draw your attention to our cautionary statement on slide two. 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 U.S. dollars and in accordance with International Financial Reporting Standards . However, during this conference call, we may discuss certain non-IFRS financial measures such as adjusted EBITDA and adjusted net income. Reconsiderations 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. Our company is Sociedad Anónima Bursátil de Capital Variable, organized under the laws of Mexico, registered in the Bolsa Mexicana de Valores at the New York Stock Exchange. Our tickers are VISTA in the Bolsa Mexicana de Valores and BIST in the New York Stock Exchange.
Miguel Galuccio: I will now turn the call over to Miguel. Thanks, Ale. Good morning and welcome to this evening call. The second quarter of 2026 was marked by the closing of that position for 18-year-old asset in Vaca Muerta. This milestone, in combination with the organic growth, took our company to a new scale, leaving us in an excellent position to capture the upside of higher oil prices. As a result, adjusted EVDA and free cash flow generation record substantial interannual and sequential increases. Total production was 156,000 units per day, 32% above the previous year. All production was 135,000 barrels per day, up 33% vis-a-vis the previous year. Total revenues during the quarter were $1.15 billion, an impressive growth of 89% compared to the same quarter of last year. Lifting costs was $4.5 per VOE, 4% below year over year. Capital expenditure was $467 million, driven by strong progress in new well activities during the quarter. Adjusted EVA was $805 million, an inter-annual increase of 99%. Net income was $322 million, an increase of 37% compared to the same quarter of last year, and 199% versus the previous quarter. Excluding the gain from La Marga Chica acquisition in Q2 2025, Net income expanded by more than nine times year over year. We record earnings per share of $3 during the quarter. Net of the Keynote Acquisition Payment free cash flow was $491 million, reflecting a significant boost in adjusted EBITDA generation and a meaningful improvement in working capital. Finally, our net leverage ratio at quarter end was 1.41 times adjusted EBITDA. On a performance basis, reflecting last 12 months figures for the acquired asset, the ratio was 1.25 times adjusted EBITDA, marking a significant reduction year on year and reflecting a very strong balance sheet. Total production during Q2 averaged 156.1 thousand VOs per day. This represents an internal increase of 32% and a sequential increase of 16%. There are two drivers behind this boost. The first is organic growth. We connected 90 new wells in the last 12 months with very solid productivity, generating a 20% production growth compared to Q2 last year. On top of this, the consolidation of our working interest in Bandurria Sur, Embajada del Toro, as of May 1st, added 14.2 thousand barrels of oil equivalent per day on average for the quarter. This reflects a run rate about 21,000 VOEs per day, which will impact fully in the third quarter. Our total production in May and June was, on average, 161.6 thousand buoys per day. Quarterly average oil production was 135.4 thousand barrels per day, 33 percent higher year over year, and 60 percent above the previous quarter. Gas production increased 30 percent on an interannual basis and 15 percent sequentially. Total revenues during the Q2 were $1.15 billion, a material growth of 89% compared to the previous year and 66% versus the previous quarter, driven by a solid increase in oil production and higher oil prices. Oil exports increased 54% year-over-year, reaching 8.6 million barrels in the quarter, representing 72% of our oil sales volume. Tradizol prices in Q2 was $89.4 per barrel, 44% above the previous year, and 49% above the previous quarter, in both cases driven by higher brands and an improvement in differentials. We sold 100% of our oil volumes at export parity prices, both domestically and internationally. In Q2, lifting costs was $4.5 per VOE, an interannual reduction of 4% reflecting our low-cost asset base and fixed-cost dilution as we continue to gain scale. On a sequential basis, lifting costs increased driven by the impact of inflation on peso-denominated goods and services amid flat effect rates. Selling expenses were $4.1 per VOE, an 8% increase year-over-year, mainly driven by higher oil prices impacting turnover tax. Adjusted EVDA during the quarter was $805 million, 99% higher interannually and 79% higher sequentially, driven by a material expansion of revenues amid flat unit cost. A adjusted EBITDA margin was 70%, an expansion of 3 percentage points compared to the same quarter of last year, and 5 percentage points above the previous quarter. Net back increased 51% year-over-year to $57 per BOE. In Q2 2026, cash flow from operating activities was $985 million. reflecting a decrease in working capital of $274 million, mostly driven by the full normalization of the working capital position of our trading subsidiary, EVEISA. We also made an income tax payment of $53 million. Cash flow used in investment activities was $886 million. reflecting accrued CAPEC of $467 million, the $392 million payment related to the QNOR acquisition, and an increase in CAPEC-related working capital of $21 million. Net of the QNOR acquisition, free cash flow was $491 million during the quarter, leaving us well-placed to deliver on our annual guidance. Cash flow from financing activities was negative $110 million, driven by the repayment of borrowings for $810 million, and interest payments of $88 million, partially offset by proceeds from borrowings for $856 million. Finally, our cash position remains very strong. standing at $605 million at end of Q2. Our net leverage ratio stood at 1.41 times adjusted EVDA or 1.25 on a pro forma basis considering the last 12 months of adjusted EVDA for the acquired assets. To conclude this call and before we move to Q&A, I will make some closing remarks. During Q2, we materially increased the scale of our company on the back of a solid organic growth and the successful closing of the acquisition of our interest in the Bandurria Sur and Bajada del Toro blocks in Vaca Muerta. These allow us to capture the benefit of the oil price spike in Q2, leading to a substantial boost to adjusted EVDA and free cash flow generation. In line with our Capital Allocation Framework, we plan to use part of the free cash flow to reduce our net leverage ratio to our target of around one times by the end of the year. We made very good progress on our annual work program and are well on track to deliver our 2026 guidance. We are maintaining our $3 billion HACCP DBA guidance at $85 per barrel as of now. but I want to provide a sensitivity due to the prevailing volatility in oil prices. For every $10 per barrel change in the second semester, adjusted EVDA changes approximately $200 million. Before we move to Q&A, I would like to thank all VISTA employees for their hard work during the quarter, as well as our investors for their continued support. Operator, we can now move to Q&A.
Operator: Thank you so much. And as a reminder, to ask a question, simply press star 1-1 to get in the queue and wait for your name to be announced. To withdraw your question, press star 1-1 again. Our first question is from Alejandro de Michelis with Jefferies. Please proceed.
Alejandro de Michelis: Yes, good morning, gentlemen.
Daniel Guardiola: Thank you very much for taking my question.
Alejandro de Michelis: Miguel, one question, please. You just have consolidated Chas Banduria Sur and Bajo El Toro. Could you please provide some kind of color of how that is going and how you're seeing the development of these assets going forward, please? Thank you.
Miguel Galuccio: Hi, Ale. Thank you very much for the question. We took over our share in the asset in May, and everything, I have to say, is moving along as we expected. Our share was consolidated approximately 19,000 VOE per day in Bandura Azur and 2,000 VOE per day in Bajada del Toro. In Bandura Azur, actually, we have three rigs running, so you can expect production to remain relatively flat. or maybe it can grow slightly toward the end of the year. We are also starting the discussion with our partners with YPF regarding the plan for 2027. Baja del Toro, as you know, is an appraisal block. The plan we are analyzing with YPF is to file re-application this year and over the next two years we will then drill some pilot wells to reach some of the areas and land the zone. and start to contract the facilities based on what we believe could be the production of the block. And we will then, as we said, plan to move to full development and contract and put some dedicated rig to develop Bajada del Toro. Thanks, Ale, for your question. Thank you.
Operator: One moment for our next question, please. It comes from Daniel Guardiola with BTG Pactual. Please proceed.
Daniel Guardiola: Hi, good morning, Miguel and team, and thank you for your presentation. I have a question on the production outlook for the company. Could you provide us the expected quarterly production trajectory through 2026, including the contribution from Bajo del Toro and Mandurria Sur? And another question on production outlook is, I would like to know if for 2027 and 2028, where you expect significant organic growth, is there a specific brand price threshold at which you would rather to prioritize free cash regeneration over production growth? And if so, how should investors think about the tradeoff between growth, shareholder distributions, and maintaining leverage within your target range? Thank you.
Unknown: Your question.
Miguel Galuccio: So starting with the first part, the consolidation of Bandurria Sur and Baja del Toro took us about 160,000 barrels per day. Today in July, we are at 162. We forecast Q3 at 160 and Q4 at 170. And we are confident in reaching our guidance that we provide that is 158 barrels per day equivalent for for the year. I am personally probably a bit more optimistic that we can even go a bit about these numbers. Related to your second part of the question, I mean, we make our plan at 65. That happened in November last year. So, as we said, you should consider that. We are not going to revise any number at the moment. And of course, at some point of time, we need to re-guide. We will do it. But for the moment, that are the numbers. Thank you for your question.
Operator: Thank you. Our next question is from Tasso Vasconcelos with UBS. Please proceed.
Tasso Vasconcelos: Hi, Miguel. Hi, Tim. Thank you for taking my question. Miguel, I think I might have some kind of follow-up question on these capital allocation alternatives. If you look at the production outlook that you have released for 2026 and 2027 and assume a brand at something close to $70 per barrel, we do hear that Vista put end 2027 close or even below one-time net debt to EBITDA. You still haven't paid any dividends, but you were quite successful in doing some very, very accretive M&As. From now on, what's the best capital allocation alternatives that you see for Vista? Do you still view some additional M&As on the radar as an alternative here, or dividends should become a high priority for Vista?
Unknown: Thank you.
Miguel Galuccio: Thank you, Tasso, for your question. Yes, look, as I always have stated, growth has been and remains our priority within our capital allocation strategy. With the additional cash that we generate, we will still keep full flexibility within the capital allocation metric that we have shown many times. That means continuous seeking M&A, additional capex now for the RIGI projects that create a new opportunity for us in the future and buy back in the short term and potentially define a return to shareholder policy that we have discussed before. And I think we are not at the stage to do it today, but it's something that we will consider in the future. Now in the mid-year term, the focus is to deliver the company and we stayed in this call to close 2026 very close to our aiming that is one time net leverage ratio if it's possible with the cash that we have generated we believe that is possible to achieve. So our capital allocation mindset today is around all those dimensions.
Tasso Vasconcelos: Very clear, Miguel. Thank you.
Operator: Thank you. Our next question comes from Leonardo Marcondes with Bank of America. Please proceed.
Unknown: Hi, Miguel. Hi, everyone. Thank you for picking my question here. So my question is regarding the drilling and completion capex for the wells, right? I mean, given the strong pickup in volcanic activity, and the significant decline in Argentina's country risk. Do you see room to renegotiate lower fees with the oil service companies that are putting their rigs and equipment in Argentina? Thank you.
Miguel Galuccio: Thank you, Leonardo, for the question, a good one. So as Argentina macroeconomics continue its normalization process, price of oil services became for me more a function of scale, volume, I mean scale and volume are the same thing, and competition. Nevertheless, as we said, Vista has demonstrated once again that innovation continues to play an important role in reducing the energy costs. An example of this are the latest progress that we did in cost reduction within the completion process. As an example, we moved some supply from 1,000 kilometers away to in basin of Baca Muerta mining supply, and lately to Bajada del Palo, but basically, I mean, tens of kilometers away from where we operate. We are re-engineering the completion process to move to wet sand that also cut a lot the cost of supply sand. And now we are switching from our frag pump from gasoline to gas pump that also is reducing cost. So I will say today, I mean, with the macroeconomic situation of Argentina, again, I will say competition, Thank you very much. Thank you so much. One moment for our next question.
Operator: It comes from Guilherme Martins with Goldman Sachs. Please proceed.
Unknown: Hi, Miguel. Hi, Tim. Thank you for taking my question. I have a quick one for my side here. If we have a pipeline, could you please explain to us or provide an update on the development of the pipeline? And also, if you could comment, do you see any risks of having to use trucking again, particularly when considering your expert ramp up in production in the second half of the year? Thank you.
Miguel Galuccio: Hi, Guillermo. Thank you for the question. The project contraction of Vemos is basically progressing very well. Overall, the project execution today is 65 percent. The pipeline is at 82. Onshore storage, I was reported, is at 38, and the offshore terminal at 73. So we forecast that the full project completion date will be by the middle of 2027. Having said that, and I think Horacio commented, the shipment of very specific components like the mooring buoy is being affected by the straight or moose closure. And the BEMOS team is basically analyzing different alternatives to solve that issue. But the project remains on schedule. and so far we don't expect any changes in our plan of evacuation, neither the need of adding tracking capacity. So, I mean, we are positive with the progress overall. Thank you. You're welcome.
Operator: Thank you. Our next question comes from the line of Andres Cardona with Citi. Please proceed.
Andres Cardona: Hi, good morning all. I have a question about M&A, right? We are seeing interest from permanent players in entering Vaca Muerta. Would you consider any opportunity to farm in areas such as Aguila Mora or Baja del Toler to try to maximize The value and production profile. And on the other hand, you mentioned growth remains a key pillar of the investment case. And I wonder if you see any opportunity over the short term. You are evaluating any opportunity as of now.
Unknown: Thank you.
Tasso Vasconcelos: Hi, Andrés.
Miguel Galuccio: Thanks for the question. As we said, as you know, we not only have been very successful operating back-and-forth assets, but also we have been very successful creating value through M&A. Our track record in the last few years is the acquisition of Aguada Federal and Madurria Norte. We conoco Phillip and Wintershall 2021 and 2022. La Marga Chica, La Ciar from Petronas, and most recently Bandurria Sur, Embajada del Toro from Equinor. So, needless to say, with the strategy that we have today, we are always using our full creativity to continue consolidating core acreage in Vaca Muerta shale oil asset. that continue to be our focus and we continue looking and being very creative in anything that we can add to what we have. Respect to our acreage position in the north, we at the moment we are not looking to dilute ourselves particularly in the current market condition and with a strong balance sheet that we have at the moment. So it's not something that we are thinking of today. Of course, condition can change and the strategy can change and we can do something different in the future. But no, at the moment, that's not the way that we look at that area. Thanks for the question.
Operator: Our next question comes from Michael Furrow with Pickering Energy Partners. Please proceed.
Michael Furrow: Good morning, Miguel, to the rest of the VISTA team there. Given the strong start to the year with 50 net tie-ins already completed by the end of the quarter, the 100 to 110 annual guide appears achievable to us. So if efficiency gains continue and provide the company with the opportunity to drill and complete more wells this year than originally planned, How would you think about the trade-off between staying within the current activity in CAPEX budget versus capitalizing on these efficiency gains by adding a few more wells this year, but potentially spending a bit more than the current plan?
Tasso Vasconcelos: Hi, Michael.
Miguel Galuccio: Yeah, interesting way of looking at this. I think we should probably look to different elements of that question. I think as the basin continues gaining scale and competition, I believe, I'm convinced more than believe that there is room to gain cost efficiencies in our operation and Vaca Muerta overall. As you know, I mean, when we compare with Permian, we're still having a gap in terms of cost. But I believe there is less room to improve operational efficiency, for example, drilling time or number of fracking stages per day. When you compare where we are today, I mean, we are very efficient what we do so far. So therefore, there's limited upside to increase activity in the very short term with the Current oil service equipment and drilling rig that we have in the country. Of course, if the service companies bring more equipment to the country, I think in mid-term, a long time, we can do better. But in the short term, I don't think the efficiency gap that we have, in particular Vista, will allow to do really more with the same equipment. Yes, we're still having a gap for cost saving.
Michael Furrow: Thank you, Miguel. Appreciate the call there. I'll turn it back.
Operator: Thank you. And we have a question from Tiago Casqueiro with Morgan Stanley. Please proceed.
Tiago Casqueiro: Hey, good morning. Thank you for taking my question. I think most of my questions were already addressed here. So, Miguel, over the past few months, We have seen some projects across the industry being submitted to the BEGI framework. So I would like to better understand here how has been the process for VISTA so far in terms of timeline. You mentioned in the first question the plan to add Barro del Toro in the framework, but should we still think of Aguila Mora and Bandura Norte as other projects most likely to be included? or has your thinking about the scope of the submission changed? Thank you.
Miguel Galuccio: Hi, Tiago. Thanks. So, yes, we are currently finalizing the documentation to file the application of RIGI for Bandurria Norte, which will probably take place in the coming weeks. We are also working on other projects, Aguila Mora, Corino Namargo Norte, Embajada del Toro with YPF. Now, that should go to the Secretary of Energy. He has a team where he analyzes all information before approval. And what we are seeing is that process, it will take a few months. So the short question, yes, we are going to file those projects, one very soon, and then we'll have to take a few months to get the result from the Secretary of Energy. But yes, I mean, we are very happy with what the government did in terms of the RIGI, and that clearly has helped us to push forward some of the projects that we have in our plans.
Tiago Casqueiro: Very clear. Thank you.
Operator: Thank you. One moment for our next question. It's from Vicente Salanga with Bradesco BBI. Please proceed.
Unknown: Hi, Miguel, Alejandro, all of this team. Thank you for taking my question. We noticed that Baja de Palo Oeste's production dropped from March to May. Wanted to know if there's anything particular going on there or just a cyclical process of tying up wells. and if you could share with us what was your exit output for Baja de Palo Oeste in the quarter. Thank you very much.
Miguel Galuccio: Hi, Vicente. Thanks for the question. So let me probably put your question in context or let's look at the big picture of development. The rationale of our development plan and activity is based in many elements. One is, of course, production. The other is delineation and the risking of the future areas where we are looking for development or to drill, facility capacities, minimizing . So there are many things that we look at. And all those elements we look at within the full core development hub. which include Bajada del Palo Oeste, Aguada Federal, and Cori Non Amargo Norte. So there's nothing specific that is going on today in Bajada del Palo Oeste and the overall production in the Operative Core Development Hub grew 10% from Q1 to Q2. basically when, if I remember properly, from 83,000, I think, to north of 90,000 barrels per day equivalent. So then, of course, if you look at field by field, that you can see changes, so you can see a field dropping and another field coming up, but the rationale is not based on those field names. We take the full development hub, the full core development hub as one and we allocate capital activity based on the elements that I said before.
Unknown: Great, thank you very much and good luck on Sunday. Thank you very much.
Operator: Thank you and this will conclude our Q&A session and I will turn the call back to Miguel Galuccio for closing comments.
Miguel Galuccio: Well, very strong quarter, guys. Thank you very much for the support. Once again, thank you to all the VISTAs, employees, co-workers, friends that have made us to come to the point that we are today. A very strong company and we're looking forward to continue performing and delivering. Thank you very much and have a good day.
Operator: And this concludes our conference. Thank you for participating and you may now disconnect.
