Vista Energy, S.A.B. de C.V. (VIST) Earnings Call Transcript & Summary

Good morning, and welcome to Vista's 2025 Investor Day. Today's call is being recorded. [Operator Instructions] This event is hosted by Vista's executive team and attended by sell-side analysts on site. [Operator Instructions] I would now like to turn the conference call over to Vista's Co-Founder, Strategic Planning and Investor Relations Officer, Mr. Alejandro Chernacov. Sir, please go ahead.

Good morning, everyone. And thank you for joining us. We are pleased to welcome you to Vista's 2025 Investor Day, our third since we started operations back in 2018. Today, we will update you on Vista's progress since our last Investor Day, explaining how we have set the stage for our next phase of profitable growth and present our new 2026 to 2028 targets. Before we begin, let me remind you that today's presentations and our responses during the Q&A session may include forward-looking statements subject to risks and uncertainties that may cause actual results to differ materially. All financial figures are in U.S. dollars and in accordance with IFRS. We may also reference non-IFRS metrics such as adjusted EBITDA. Reconciliation of historical figures are available in our public filings. During today's presentations, we will refer to previous targets as those set in our 2024 to 2026 plan disclosed as you may remember, during our 2023 Investor Day. We will refer to new targets as those introduced for the 2026 to 2028 period and our 2030 vision. Please refer to Slide 2 for the full text of our safe harbor statement. We will begin our presentation with Miguel Galuccio, Founder, Chairman of the Board and CEO, who will open the event by showcasing how Vista has scaled its leadership in Vaca Muerta and how our unique playbook delivers profitable growth with industry-leading total shareholder returns. Next, Juan Garoby, Co-Founder and CTO; and Matias Weissel, our COO, will provide a deep dive into how Vista is leveraging innovation at scale and new technologies to double down on efficient growth. They will also provide an updated production forecast through 2028. Following that, Pablo Vera Pinto, Co-Founder and CFO; and myself will walk you through our updated financial outlook. We will present how Vista's export-driven business model, disciplined capital allocation and cost leadership translate into strong EBITDA and free cash flow growth, a strengthened balance sheet and robust shareholder returns. To close, Miguel will outline our 2030 vision, which reflects a company with higher scale, continued growth and global competitiveness. Before we begin, a few housekeeping items. We expect today's presentation to last around 40 minutes, followed by Q&A. If you are joining virtually, you'll be able to ask questions via chat at the end. A replay and the presentation deck will be shortly on vistaenergy.com. With this, I'll now hand the presentation over to Miguel.

Good morning, and welcome to Vista's 2025 Investor Day. Two years ago, when we meet for our last Investor Day, we discussed how in just 5 years since inception, we have built the company we envisioned when we founded Vista, a leading efficient, high-growth and profitable oil producer with a clear purpose and a world-class team capable of delivering exceptional results. We also said that Vista was ready to accelerate growth and strengthen its leadership in Vaca Muerta. Today, I am proud to say we overdelivered it. Since 2021, we have tripled production and quadrupled adjusted EBITDA. We are now entering a new phase of growth, one that builds on what we have achieved, taking Vista to the next level with a larger scale. Our next phase is self-funded and is set to deliver more profitable growth and industry-leading margins. This will generate an increasing amount of free cash flow. By 2028, we plan to increase production to 180,000 barrels of oil equivalent per day and an adjusted EBITDA to $2.8 billion, 75% above our guidance for 2025. During this period, we forecast our ROCE to remain above 20%, a level that puts Vista among the highest return E&P company globally. So where do we see ourselves 5 years from now? By 2030, we expect to be generating $1.5 billion of free cash flow per year. We have the assets, the capabilities and the committed team to become a cash-generating machine ready to deliver sustainable long-term value. That is what scaling success look like for Vista. I will now provide you with more detail on how this strategy translates into more growth and higher efficiency. Let's start with a quick recap of our growth story. Since our Investor Day in 2021, we tripled in size with total production growing from 39,000 to 114,000 barrels of oil equivalent per day in 2025. We quadrupled adjusted EBITDA from $380 million in 2021 to approximately $1.6 billion in 2025. We are now the largest independent oil producer in Argentina and have also become the largest oil exporter in the country. The strength of our business model is clearly reflected in our numbers. Vista has consistently outperformed peers across efficiency, profitability and shareholder returns. At $40 per barrel, our netback reflects a profitable, low-cost operation and provide resilience to lower oil prices. Our average ROCE since 2021 was 31%, reflecting the successful execution of our capital allocation framework. And since 2021, our share price has compounded at 73% per year, one of the strongest performances in the global E&P space. This combination of operational excellence and disciplined capital allocation is what sets Vista apart. It's not only about growing fast, it is about growing profitably, generating cash and delivering tangible value to our shareholders. We have done the work to derisk Vista's next phase of growth, and we are now ready to raise the bar again. We derisked and acquired new acreage. We now have more than 1,650 wells in our ready-to-drill inventory, an addition of 500 wells since our last Investor Day. Of this, more than 1,300 or 80% are yet to be drilled. We secured drilling and completion equipment as well as treatment, transportation and export capacity. We now have 4 drilling rigs and 2 frac sets under contracts and operation, doubling 2023 operating capabilities. We also doubled oil treatment capacity and triple contracted pipeline capacity. We tripled export volumes, which now represents 62% of oil production, 10 percentage points above 2023. We are fully funded to deliver double-digit growth. We are now free cash flow positive and issue a long-term financial debt, which provides us with substantial financial flexibility. We have consolidated one of the most experienced committed management team in the region. We have a unique culture based on fundamentality and full alignment of incentives. In short, we have built an outstanding company ready to grow profitably into the next decade. Now let's take a step back and look at the big picture with the global energy context. In today's fast-evolving energy landscape, one thing is clear, demand for oil is not going away anytime soon. On the contrary, we expect oil demand to continue growing for several years before reaching a plateau. This growth will be mainly driven by economic development in the emerging markets, where energy demand per capita is still 4x to 5x lower than in the developed world. At the same time, under investment in oil exploration and development over the past decade leads us to have a contracted view on mid- and long-term oil prices. Finally, evolving geopolitical dynamics are leading to higher volatility in commodity markets and an increased need for reliable and affordable energy. We believe the winners in the next decade will be the low-cost, short-cycle, reliable energy producers, and that is where exactly Vista stands. We have the playbook to thrive in this context, and it's based on 3 pillars. First, a large, high-quality, short-cycle and low-cost asset base with a total unit cost of approximately $11 per barrel and 1,300 wells yet to be drilled, each with a payback of only 2 years. Second, a strong culture driven by a team that is relentless to achieve results, committed to people and guided by innovation and agility. And third, a solid total shareholder return strategy, supported by a disciplined capital allocation framework that has delivered a 73% share price CAGR since 2021. This playbook has proven to work, and now we are ready to apply it on a larger scale. We are now entering in another phase of profitable growth to continue delivering superior shareholder returns. By 2028, we expect production to reach 180,000 barrels of oil equivalent per day, a 58% increase from 114,000 in 2025. Adjusted EBITDA is projected to grow by 75% from around $1.6 billion in 2025 to $2.8 billion in 2028. This growth will generate around $1.5 billion of cumulative free cash flow between 2026 and 2028, providing us with the flexibility to return cash to shareholders, deliver and pursue accretive M&A opportunities when they arise. In short, our growth is profitable and our balance sheet is strong, future-proofing shareholder returns. Operational excellence and sustainability remain at the core of everything we do. Since our last Investor Day, we have made very good progress in reducing carbon emission intensity, developing carbon credits through our nature-based solution projects, maintaining a strong safety track record and proactively engaging with the local communities. Gabriela Prete, our operational excellent manager, will share a brief update of these topics from a unique location in Argentina.

Thank you, Miguel. Since day one, we have worked hard to build a company of high standard that is fit for the future. Safety is the bedrock of our organization. We operate with the highest oil and gas industry standards in accordance with established international best practices. Our strong and consistent safety track record is a consequence of stringent evidence to procedures, tailored training and close supplier engagement. Our goal is to maintain our total recordable incident rate below 1, in line with the industry's best practices. We have achieved this target over the last 5 years. The focused execution of our emissions reduction strategy has allowed us to achieve a greenhouse gas emissions intensity in our oil and gas operations including Scope 1 and 2 of only 7.5 kilograms of CO2 equivalent per BOE in 2025. This ranks us among the first decile worldwide and more than 75% below the global average. This was achieved by investing in highly efficient projects which allows us to maintain a very competitive lifting cost. Some examples include, the installation of paper recovery units, the construction of a gas pipeline linking Aguada Federal with Bajada del Palo Oeste, the electrification of new gas compression units and the use of cost competitive renewable energy across our oil fields. I am standing here in Rolón Cué, our flagship NBS project, surrounded by millions of trees that didn't exist just 3 years ago. This is a clear testimony of our positive contribution to the environment. Here, Aike, a Vista subsidiary, has developed an NBS project that combines native and exotic trees. Aike manages 13 nature-based projects spanning 43,000 hectares across 7 provinces in Argentina. Since 2022, Aike planted around 5 million trees in afforestation projects, achieving average growth rates comparable to leading international projects. Argentina's natural endowment allows Aike to generate low-cost, high-quality carbon credit. We have sized our NBS project so that the carbon credit generated by Aike, match the size of Vista's residual hard-to-await emissions in 2026. Vista takes a proactive approach to engagement with local communities. Since 2021, we contributed almost $5 million to voluntary social programs focused on education, employment and biodiversity. We have partnered with more than 10 NGOs across the country to implement these initiatives. Our highest standards make our operations more resilient and strengthen our license to operate. I will now hand it over to Matias, who will continue with the presentation.

Good morning, everyone. Together with Juan, we'll walk you through Vista's production growth strategy, focusing on operational excellence, efficiency and growth. Since our last Investor Day, Vista has continued to scale at an exceptional pace. Production more than doubled since 2023, reaching 114,000 barrels of oil equivalent per day in 2025. Our [indiscernible] reserves grew by 60% to a total of 519 million barrels of oil equivalent at the end of 2024 on a pro forma basis. This growth was driven by both strong organic development and the successful integration of the 50% stake acquired in La Amarga Chica. Our focus on productivity is demonstrated by outstanding well performance. When we compare Vista's wells across Vaca Muerta, our productivity consistently exceeds that of peers, reflecting the quality of our assets, our best-in-class operating capabilities. In the first 6 months of production, the average Vista wells delivers approximately 200,000 barrels of oil normalized to 2,800 meter lateral length. That is 24% above the Vaca Muerta average and 48% above the Permian average. After 12 months, the trend remains the same. With a cumulative production of 330,000 barrels of oil, the average Vista well produces around 22% more than the Vaca Muerta average and around 72% more than the Permian average, also on a normalized basis. This consistent outperformance gives us the confidence that our model is both repeatable and scalable as we continue expanding development across our acreage. Our standard investment unit is a 4-well pad, which has a 120-day time to market, including drilling, completion and tie-in. With a payback period of only 2 years, the short-cycle models gives us a distinct competitive advantage in a volatile environment. Vista's long-term growth is supported by its large, high-quality short-cycle well inventory. Our inventory has increased by 500 wells since 2023, driven by: first, the acquisition of 50% La Amarga Chica, neighboring our core development hub; and second, the successful pilot recently completed in a new development area within Bajada del Palo Oeste, expanding our core development inventory. Today, we have around 1,300 wells yet to be drilled, providing an inventory of at least 10 years with breakeven prices of $45 per barrel. Looking ahead, we plan to continue derisking our acreage and see additional inventory upside from untested landing zones within our existing blocks. Juan will now deep dive into how we have successfully implemented technology and innovation to extend our well inventory, improve efficiency and reduce costs.

Good morning. I am very excited to share the successful results of the pilot project in the center of Bajada del Palo Oeste, an area partially covered by structural faults. We confirmed the technical feasibility of drilling and completing wells in between faults, a concept we were the first to test in Vaca Muerta. This is yet another example of our innovative and pioneering approach to developing the play. The wells have 2,800 meters of lateral length and an average of 48 stimulation stages and are showing very good productivity. After 45 days, they produced on average 55,000 barrels of oil, in line with the average Bajada del Palo Oeste well. Based on these results, we have added 180 new wells to our inventory in Bajada del Palo Oeste, Coirón Amargo Norte and Bajada del Palo Oeste. Growing our inventory is only part of the story. Another key driver of our competitiveness is how efficiently we develop it. As we continue expanding our drilling runway, we're also focused on further reducing well cost. In 2024, our average drilling and completion cost was $14.2 million per well. Today, our D&C cost has been reduced to $12.3 million. By the end of 2026, we expect to reach $11.7 million per well and $11 million by the end of 2028. These gains come from innovating and adopting new technology and optimizing processes. For example, we recently adopted bulk transportation of wet sand, eliminating sun drying costs and reducing sand logistic costs. We implemented an innovative real-time simulation process that enhances well completions and lowers completion cost. We also deployed new remotely operated directional drilling technology to further reduce costs. Finally, we introduced new contracting practices by, for example, de-bundling drilling services and renegotiating certain key contracts, achieving additional cost savings. These combined efforts have made Vista one of the lowest cost operators in Vaca Muerta. We never stopped innovating. Over the coming months, we will implement new cost reduction initiatives such as moving our sand washing plant to our core hub to further reduce sand logistic costs. We have recently adopted bulk wet sand transportation, which has already resulted in a cost reduction of around $200,000 per well. During 2026, we plan to relocate our sand plant to our core development hub and source sand from nearby sand mines. By doing so, we expect to significantly reduce transport distances, lowering both sand transportation cost and our footprint. Once fully executed, we expect this project to reduce sand cost by an additional $400,000 per well, bringing total savings to approximately $600,000 per well. I will now deep dive into an example of how our thorough understanding of the subsurface allowed us to implement a real-time completion optimization process aimed to reduce cost and improve productivity. We have introduced real-time monitoring capabilities using in-house proprietary AI tools, which allow us to monitor how stresses build up during the hydraulic stimulation process and adjust completion strategy accordingly. This innovative practice helps reduce the probability of runaway fracs, improve frac hit identification, characterization and decision-making to mitigate impact on parent wells. This novel technology was implemented earlier this year and has already improved key operation metrics. We reduced lost completion stages to less than 1%. We cut on average runaway frac stage per well, and we generated average savings of $150,000 per well. Looking ahead, we have a portfolio of productivity-enhancing technologies that will be tested in the coming years, such as Huff 'n Puff, surfactant injection and the acquisition of a new 3D seismic that should eliminate parts of the field looking for buckets of productivity that have not been identified to the moment.

Building on our strong foundations, our solid operational expertise, large asset base, low unit costs and unique culture, we are ready to pursue a new phase of profitable growth. We plan to tie in between 80 and 90 wells per year between 2026 and 2028, requiring $1.5 billion to $1.6 billion of CapEx per year. All the capacity needed to execute this plan, drilling, completion, crews, treatment, transportation and export is already secured. This plan will increase production from 114,000 BOEs per day today to 140,000 in 2026, 160,000 in 2027 and 180,000 BOEs per day by 2028. That represents an increase of almost 60% in 3 years, implying a CAGR of 16%. With that, I hand it over to Paolo and Ale, who will take you through how this operational performance translates into financial strength and superior total shareholder returns.

Thank you, Matias. Good morning, everyone. Over the next few minutes, Ale and I will present how our profitable growth plan translates into strong financial metrics that enable us to continue delivering industry-leading total shareholder returns while maintaining a robust balance sheet. Our business model is export-driven. Virtually, all incremental barrels we produce will be sold into international markets. Exports improve the quality of our revenues, diversifying commercial risk and providing a strong currency hedge. Our total revenues are expected to grow by 72% from about $2.5 billion in 2025 to $3 billion in 2026 and $4.3 billion by 2028. We plan to double export revenues from $1.5 billion in 2025 to $3.2 billion by 2028. This means that by 2028, around 3/4 of Vista's total revenues will come from oil exports, up from 60% today. Our oil exports will reach destinations across the world, including North and South America, Europe, Asia and Australia. Our cost base remains among the most competitive in the sector globally, ensuring resilience in low oil price environments while maintaining significant upside exposure to higher oil prices. By combining low lifting cost, efficient transportation through pipelines and a lean organization, we plan to maintain unit costs at $11 per barrel. With Brent between $60 and $70, our netback ranges from $38 to $46 per barrel. Even at $50 Brent, we still generate a healthy netback of $29 with an upside potential of reaching $54 per barrel in a scenario of Brent at $80. To maintain production at 130,000 BOEs per day, our expected Q4 2025 production rate, we need to invest the equivalent of $15 per barrel. After deducting this maintenance CapEx and financial interest plus income tax, our free cash flow to equity ranges between $13 and $19 per barrel in a scenario of Brent in the range of $60 to $70. I will now give the floor to Ale, who will walk you through our financial projections.

Thank you, Pablo. Our growth plan is expected to deliver solid financial results. Adjusted EBITDA is projected to grow from $1.6 billion in 2025 to $1.9 billion in 2026 and $2.8 billion in 2028. This is an increase of 75%, which implies a 21% CAGR over the next 3 years. During the same period, our adjusted EBITDA margin will remain around 65%. Our average ROCE over that period is forecast to be well above 20%, keeping Vista's return on capital among the industry's top quartile. We plan to deliver double-digit growth while generating substantial free cash flow, too. Between 2026 and 2028, we expect to generate cumulative free cash flow of $1.5 billion. This financial strength gives us the flexibility to return cash to shareholders, reduce gross debt and pursue synergetic business development opportunities. High profitability and strong cash flow generation will continue to strengthen our balance sheet. We expect to deliver self-funded growth while organically reducing net leverage. Gross debt currently stands at about $2.9 billion with an average maturity of 4.5 years and an average interest rate of 6.7%. We have a sound debt maturity profile with annual debt repayments representing an average of only 15% of annual adjusted EBITDA over the next 3 years. Looking ahead, we expect gross debt to remain broadly stable, while the net leverage ratio declines organically from 1.5x today to below 1x by 2028, mainly driven by the continued growth of our adjusted EBITDA. Our business plan is designed to deliver value across all different oil price cycles, supported by our low-cost base, capital discipline and operational and contractual flexibility. In our base case, we expect to generate $1.5 billion of free cash flow between 2026 and 2028, assuming Brent at $65 in 2026 and $70 thereafter. In a downside scenario, with Brent $10 below our current base assumption, we can still deliver the same self-funded production growth, still generating $0.5 billion of free cash flow. In an upside scenario, with Brent $10 above the base case assumption, free cash flow rises to $2.5 billion over the same period. That means $1 million more. This resilience, combined with our ability to rapidly adjust our activity to market conditions has been and will continue to be a cornerstone of Vista's success.

Our capital allocation priorities, which have delivered solid total shareholder returns since 2021 remain firmly in place. Our focus is simple and remains unchanged, generate cash, maintain financial discipline and allocate capital where it creates the most value. We will efficiently deploy net cash generation to return cash to shareholders, initially prioritizing share buybacks. We may also use cash to reduce gross debt, accelerating deleveraging and further strengthening our balance sheet. Finally, and in line with our proven track record of generating value through business development, we will continue evaluating selective synergistic M&A opportunities focused on the oil window of Vaca Muerta. This disciplined approach will allow us to maximize total shareholder returns while maintaining financial flexibility. Miguel will now briefly close with our 2030 vision.

Thank you, Pablo. As we look ahead, our 2030 vision is clear. Our plan is to deliver double-digit production growth over the next 5 years. As I said before, we have the playbook, and we will continue to apply it at a larger scale. By the end of the decade, we expect to produce over 200,000 barrels of oil equivalent per day, 33% above the forecast we shared during our 2023 Investor Day. This production growth is forecast to generate an increasing amount of free cash flow driven by our highly efficient operating model. As we continue to scale and reduce costs, we expect to deliver strong returns on capital. This allows us to envision a company that by 2030, assuming a mid-commodity cycle Brent of $70 per barrel is projected to generate a recurring free cash flow of around $1.5 billion per annum. Before we move to Q&A, let me summarize today's key messages. In this presentation, you have seen how we have materially transformed Vista, scaling our production, strengthening profitability and becoming a leading independent player in Vaca Muerta. Our growth is built on efficiency and capital discipline, designed to deliver value across all price cycles. Importantly, it's fully aligned with the global energy market dynamic. We have derisked the next phase of growth, expanding our well inventory and securing drilling and completion equipment, crews, pipeline and export infrastructure while maintaining financial flexibility to keep growing profitably. Our updated plan drives double-digit annual EBITDA growth, and we will continue delivering industry-leading total shareholder return. Vista is still a young company. Yet in just 7 years, we have become the benchmark of performance in Vaca Muerta and one of the most profitable independent E&P companies in the America. We have the assets, the team, the culture to keep creating value for our shareholders for Vaca Muerta and for Argentina. Thank you for your continued trust and support and for showing us in this next phase of growth. I will now move to Q&A.

[Operator Instructions] First question from Alejandro Demichelis from Jefferies.

Miguel, one quick question. It has been a tremendous journey since the 4 of you put the company together only a few years ago. Now, you're entering a new phase of growth. Maybe you can talk about the culture, what's the secret sauce that you have here to deliver on this next phase, please?

Thank you, Alejandro. Good question to the heart. I will set talented people and company culture. At the end of the day, companies are run by people. And we have extraordinary people in a culture that empower them to deliver extraordinary results. And they have been delivering results that have beaten market expectation, shareholder expectation and sometimes their own expectations. I also like to say that Vista is a company run by their owners. Between 30% and 40% of our employees hold and have received Vista shares. Remuneration of the leaders that you will meet tomorrow have a component of 40% of Vista shares and the C-suite, 75% of their compensation is Vista shares. That gives an extraordinary incentive to deliver results fully aligned with our shareholders. Today, we discuss a lot about operational excellence. Operational excellence for us is a blend of competency, talent, processes, technology and innovation. And that is in the heart of everything that we do. When we drill a well, we think about operational excellence, when we complete a well, when we close an M&A transaction, when we develop an export market, when we manage risk above and below surface, we think on operational excellence. Also, we have an entrepreneurial mentality. We like to keep things lean. That’s why despite of this enormous growth that we have during the last 7 years, we have maintained our organization extremely lean. We have set a rule to ourselves that between a tool pusher that is today drilling in Vaca Muerta and myself, we cannot have more than 4 layers. That ensure us that the decision-making process is still simple and still fast. We have born as a start-up. And when you look at Vista today, you have the size of the corporation. But we remain thinking as a startup. That's why innovation is in everything that we do. We have a team fully dedicated to innovation. It is run by Juan today, wear the hat of CTO, and you will met [indiscernible] that is leading that front in the field. And innovation is key for us to basically to be ahead. I have taken most of the calls -- all the calls during the quarter review. And today, during the Investor Day, I plan to give the floor to the people that have built the company with me that are escorting me today, the C-suite that is sitting here. And tomorrow also, we will give you full exposure to the people that we have in the field. And back to your question and back to my fair answers, this talent of people is what make us a company that is different and managed to deliver the results that we have delivered so far. Thank you very much for the question.

So the next question from Claude Rivera from Santander.

First question is, what were the key factors behind the decision to accelerate drilling and increase well count? And what led you to set this specific number of wells at the right level of activity?

Super. Well, I will let that question to be answered by Pablo and Matias, both part of your question.

Perfect. Thank you, Claudia. I would say that the primary driver -- I can even say the only driver is to drive enterprise value. In our case, more production growth is more value growth, right? Every well we drill adds value to Vista. The wells we're drilling next year have an IRR of between 40% and 60%. And if you look at our track record of return on capital employed, it's above 30% for the last 5 years. It's going to be well above 20% for the next 5 years, and that's almost double our cost of capital, right? So it makes a lot of sense to go to this higher level of CapEx. Obviously, there are certain considerations to not go too aggressively into production growth mode, and that has mainly to do with maintaining a strong balance sheet. We have been free cash flow positive in Q4. We are going to deliver a Q4 that's free cash flow positive. And we've set a rule to be free cash flow positive during 2026. And that puts sort of a financial limit to the pace of growth. And then there are obviously other operational consideration when it comes to defining what's the optimal level, and I'll let Matias comment on that.

Thank you, Pablo. Yes, when you design the field, we are fully focused on the core development hub. So this rig count of 4 rigs in operated areas has a sense that this drive we will build and design development in corridors. So 1 of -- each of those rigs are going to drill in each of their corridors, talking about Bajada del Palo South corridor, North corridor and also BPE. And to add to that, we have already all the capacity contracted in terms of internal capacity of treatment, also transport, we have the crews. And also La Amarga Chica happens the same. You have 3 triangles and each of triangle, we are going -- YPF is going to operate with 1 rig. So somehow, we have designed from the subsurface to the surface the way we want to develop the field, and that's really combined with the business point of view that Pablo just answered.

The next question is from Leonardo Marcondes from Bank of America.

So my question is how sensitive is your business plan to oil prices? I mean, what is the price range that your plan remains untouched, right, from both upper and bottom of the range, right? And another key point to understand is, is it free cash flow driven? I mean, if oil prices average, I don't know, $90 or $80 per barrel over the next years, would you consider accelerate the drilling plan in order to maintain the free cash flow indicated in your guidance, also observing the infrastructure potential bottleneck there, right?

Thank you, Leonardo. I will leave this question to Alejandro.

You, Miguel. I mean let's start with sensitivities. I mean, if we think of the plan, I think we're going to be generating $7.2 billion of EBITDA in the next 3 years. If you move prices $10 up or $10 down, it's approximately $1.2 billion of difference. So it will be $8.4 billion or $6 billion, if you see it on an EBITDA number. Then if you relate this a bit more to free cash flow, I think we covered that in the presentation, $10 less, and that's why I want to use this number, takes that $1.5 billion that we're going to be generating in the next 3 years to $0.5 billion. So you're still going to be growing at the same pace, targeting those 180,000 or those 200,000 barrels per day in 2030 by generating $0.5 billion of free cash flow over the next 3 years. So what I would say there is that those $65 or $70 that we're seeing from '27 onwards, lowering them by $10 will still give you a position where $55 next year or $65 or $60 going forward, you're still going to be delivering the same amount of growth. So on the lower side, I would say, at those levels, it will continue the same way. If it goes a little bit below that, we'll see how we play with the CapEx. And of course, see how much CapEx actually costs in a lower price environment. Now let's see on the other side, as you said, I mean, let's say, prices go to $80 or $90. The way we plan the development, and I think Matias just covered part of that. This is what we plan to do in terms of production. We might accelerate a bit here or there, but it really will go around the production that we are actually targeting today. So that additional cash flow, if we actually have a positive year or a positive part of the cycle, we will probably use to either delever the company. It's a good time to delever sometimes when you actually have a higher price of oil or a peak and also in other ways to return more cash to shareholders.

Next question comes from Thiago Casqueiro from Morgan Stanley.

My question is related to drilling and completion costs. Given the $11.7 million for year-end '26 and then $11 into '28, where do you currently see the comparable figures for Permian? And also, do you see a site to your numbers here? But in other words, do you see further room to reduce this number or even accelerate the reduction through 2028?

Good question. Thiago. I will pass it to Juan.

Thank you, Thiago. Okay. So -- as far as our comparison to Permian, besides the difference in scale where in Permian, you have more than 500 rigs drilling. And in Vaca Muerta, you have less than 40. Besides the capital cost in one country and the other, there are some specific technical differences between Permian and Vaca Muerta. I'll get a bit technical on this, but in Vaca Muerta is the confined stress is much higher than in Permian, and that makes the rock more difficult to be drilled. Also in Vaca Muerta, we need one additional casing strength to isolate areas or formations of different pressure regimes. And we use equipment and techniques for managed pressure drilling that is not something that is used in Permian. Also, the cost of labor here in Argentina is higher, and we expect that to be partially at least tackled with the reform, the labor reform that is sent to the Congress in December. So there are some specific differences between Vaca Muerta and Permian. As far as going below $11 million, we have put together a team, as Miguel said, that is fully focused on well cost. And we're reviewing everything. We're reviewing all the cost structure. We're reviewing contracts, and we're renegotiating contracts. We're reviewing processes, and we are analyzing and testing new technologies. With that, we have a portfolio of opportunities that will take us to this $11 million number. But there are some other opportunities and some other technologies that are being analyzed at the moment and will be tested probably in the future that may help us go further down. For instance, integration as vertical integration as we did with the sand plant production and logistics, going further on that may help us on reducing our well cost even further.

Next question from Tasso Vasconcellos from UBS.

It's been very interesting to follow the story from Vista to hear and great to see the outlook ahead. My question, I think, is more on the industry side because on the business plan, you mentioned your expectations to have a Brent at $65 next year and probably moving to $70 in the upcoming years. And when we look at these prices, it's not consensual. It could move lower to $50 or inventory higher to $70 or inventory even higher to that, right? So I think it would be great to hear from you, maybe to Miguel this one, what your viewing in the industry? What gives you confidence that Brent will be closer to the $70 1 or 2 years from now and not closer to the $50?

Thank you, Tasso, for your question. I will take this one. We are very contracted and positive on $70 that we have planned from '27 onwards, mainly because 2 or 3 things. The first one is we believe the supply-demand balance going forward is going to be driven by the undeveloped countries that today are consuming 4x or 5x less energy than the developed country. And we believe, okay, due to the fact that the E&P industry have not invested in exploration during the last 20 years, that balance, it will play a positive balance to having to sustain a price that is about $70. Geopolitically, we can guess anything, okay? But I think we will continue being experience of being in a volatile war. And for me, that if you take what we have on positive and negative, I believe it's going to play in favor of having higher oil prices and lower oil prices and anything can happen in the middle. Saying all that, we are always prepared for the downside case, okay? And as I have explained many times before, we have built the business based on having a portfolio of ready-to-drill wells that are basically fast to deploy, but also fast to stop. And we proved that during the COVID-19. We have flexible contracts with our service providers. We drilled a well in 13, 14 days, and we completed a well in another 12 days. So for us, a pad of 4 well is almost a month, 1.5 months. It's easy to start and easy to stop. Today, we have a cash flow positive operation. So we are not super leveraged. And also, we have a very good margin. When you look at our netback today are between $40 and $50. So we have room. So I said we can go probably down to 60% without changing our plan. And if it will go to 50%, we will have to adjust our plan and go back if it just happen for a period of time.

Next question comes from Vicente Falanga from Bradesco.

Congratulations on this great event. My question is, clearly, you're going to have excess cash to shareholders on your plan. In terms of remuneration, would you rather do buybacks? Or would you rather pay cash dividends? And also, if you can provide us an update on the Petronas shares?

Super. I will pass to Pablo this question.

Perfect. Thank you, Vicente. So as you see in the presentation, our free cash flow progresses over time, right? Initially, it's around $200 million, and it grows to $500 million, $700 million, $800 million and more than $1 billion in 5 years, right? So we think it's a bit too early in that cycle to define a fixed dividend policy. So I would say next year, the next 12, 18 months for sure, share buybacks will be a priority over dividends, in particular, our understanding of the stock price being at a discount to what the target prices of essentially all of you is and what we believe is the fair market value of that stock, right? So we'll prioritize that. In terms of Petronas, a few days back, we received a communication from Petronas that they have successfully disposed of all the shares. So they have all been 3.7 million shares have been placed in the market.

Next question comes from [indiscernible] from JP Morgan.

Congrats on the very constructive plan presented today. I wanted to explore a little bit more on the drilling plan. So Matias was mentioning that we had unlocked 180 new wells, right? And we have the plan of drilling 80 to 90 wells per year. So could you explain a little bit on how the tie-ins will be developed? And if you can explain also the Coirón Amargo Norte that is one region that has not been drilled. What are your expectations towards that?

Thank you, Milan. I'm going to take that one. It's a good one. Just to understand our plan in the next 3 years is to be focused on the core development hub. So the first year, taking into consideration, for example, 2026, we'll be drilling 85 wells. Those 85 wells are coming from our operated assets. That's mostly 60 wells, mainly focused on what we call core development hub. When we call core development hub, it's all Bajada del Palo Oeste and Este and also that we are going to operate with 4 rigs. To add to that sum, we need to add the La Amarga Chica that are 25 wells at a working interest. So if you add the 60 with 25 with 85 wells. And that's going to somehow what's going to happen in 2026. Then we have the upside of the pilots. We're going to be piloting Águila Mora and Coirón Amargo Norte, but that's going to happen in between 2027 and 2028. Specifically related to Coirón Amargo Norte, we have a planned pilot for 2 wells. I assume that's going to be at the end of 2027. What is interesting, what happened in this block is a 22,000 square -- 22,000 acres block. It's all the [indiscernible] activity that happened at the north in Bajada Palo Oeste, also in different kind of activities, Shells and Pan American, they had really good results. So it's encouraging for us to put a pilot early there. And another advantage that has the block is pretty easy to link with the infrastructure of Bajada del Palo. So we're very confident on that pilot of Coirón Amargo Norte.

Next question from Andres Cardona from Citi.

It has been an amazing journey since 2017 when you did the IPO as a SPAC and now showing these ambitious targets. And my question is about the 2030 free cash flow. If you can help us to break down the assumptions behind that number.

Ale, do you want to take this one?