Snapshot: Vista Energy’s Argentina shale push

Argentina’s second-biggest shale oil producer, Vista Energy, is edging closer to the 100,000boe/d landmark.

The Mexico-headquartered driller is laser-focused on shale and aiming to achieve its goal in 2026.

Company hydrocarbons production last quarter climbed 14% year-on-year to 55,046boe/d. Oil output rose 15% to 47,299b/d. 

Vista expects to exit this year with a production rate of around 85,000boe/d, against a backdrop of higher capex, which climbed 50% in the first quarter to US$242mn.

Accounting for around 36,000b/d in 1Q24, shale acreage Bajada del Palo Oeste is Vista’s chief production asset. Other key unconventionals blocks are Aguada Federal, Bajada del Palo Este and Águila Mora.

The company is importing a third high-spec rig that will start operating next half, equipment that should spur an upward revision in guidance and in capex by US$150-200mn, the company’s 1Q24 results call was told.

Vista plans to tie-in up to eight additional wells by year-end, ramping up today’s tally of 46. 

Against a backdrop of a delayed addition of Oldelval pipeline capacity, Vista is increasing dispatch via truck, the call was told.

Capacity delivered by road was around 2,000b/d last quarter, a rate that climbed to almost 9,000b/d in Q2 and could climb to up to 12,000b/d in Q3.

Vista CEO Miguel Galuccio said during the company’s 1Q24 results call that pipeline dispatch capacity was 50,000b/d and trucking capacity was up to 20,000b/d. Around October, 15,000b/d of new Oldelval pipeline capacity is due to become available.

Next year, a further 15,000b/d of Oldelval capacity is due to become available for Vista, ramping up overall dispatch capacity to 100,000b/d.

OIL, GAS PRICES

Vista reported an average realized oil price of US$70.30/b for Q1, up 6% year-on-year.

The average realized price was US$69.30/b on the local market and US$74.00/b for exported output. 

The company sold 57% of volumes, combining international and domestic markets, at export parity prices last quarter, a share expected to remain largely flat in Q2. 

Argentina is gradually bringing local prices in line with export prices against a backdrop of a market deregulation push by the administration of President Javier Milei.

This quarter, around 50% of Vista volume is expected to be exported. About 10% of local volumes sold are forecast to fetch export parity price.

In contrast, the average price fetched for natural gas was down 40% to US$2.80/MMBTU (million British thermal units), chiefly driven by a drop in industrial gas prices to US$1.20/MMBTU from US$3.00/MMBTU a year earlier. Export prices obtained were US$6.90/MMBTU. Increased supply, supported by a midstream buildout, has dampened the outlook for natural gas prices in the country.

YPF MATURE CONVENTIONAL FIELDS DIVESTMENT

Argentina’s biggest driller, state-controlled YPF, is reducing its conventional hydrocarbons footprint via the divestment of 55 mature conventional fields.

Like Vista, YPF is tightening its focus on shale oil, given its margins.

Galuccio told the call: “I believe it’s a very rational decision, and it’s a good path that YPF is taking in that direction, and I applaud them for that.”

M&A

Vista has disclosed interest in shale assets being offloaded by driller ExxonMobil.

Galuccio said the company was participating in the process but that it was “not desperate for more resources.”