Vista Energy, S.A.B. de C.V. (NYSE:VIST) Q4 2022 Earnings Call Transcript

Miguel Galuccio: 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.

Rodrigo Nistor: 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?