Vista Oil & Gas ((VIST)) has held its Q3 earnings call. Read on for the main highlights of the call.
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Vista Oil & Gas Reports Strong Growth Amid Concerns Over Cash Flow and Oil Prices
The latest earnings call from Vista Oil & Gas showcased a robust operational and financial performance, marked by significant production and revenue growth. Despite these achievements, concerns about free cash flow and declining realized oil prices slightly tempered the overall positive sentiment.
Significant Production Increase
Vista Oil & Gas reported a remarkable increase in production, reaching 127,000 BOEs per day, which represents a 74% year-over-year and a 7% quarter-on-quarter rise. Oil production alone was 110,000 barrels per day, marking a 73% increase from the previous year and a 7% sequential growth.
Strong Financial Performance
The company’s financial performance was equally impressive, with total revenues hitting $706 million, up 53% from the same quarter last year and 16% from the previous quarter. Adjusted EBITDA also saw a significant rise, reaching $472 million, which is a 52% year-over-year increase and a 70% sequential improvement.
Successful Well Tie-Ins
Vista successfully connected 24 wells during the third quarter, contributing to its production growth. The company plans to accelerate new well activity in the fourth quarter, with expectations to tie in 12 to 16 additional wells.
Robust Export Activity
Oil exports surged by 84% year-over-year, totaling 6.3 million barrels for the quarter. Impressively, 100% of the oil volumes were sold at export parity prices, underscoring the company’s strong export strategy.
Free Cash Flow Concerns
Despite the strong financial metrics, free cash flow was nearly neutral at minus $29 million. This was attributed to higher adjusted EBITDA and a decrease in working capital, which remains a point of concern for the company.
Decline in Realized Oil Prices
The average realized oil price was $64.6 per barrel, down 5% on an interannual basis, although it rose 4% sequentially. This decline in prices poses a challenge for maintaining revenue growth.
Forward-Looking Guidance
Vista Oil & Gas provided an optimistic outlook for the future, with plans to accelerate new well activity in the fourth quarter. The company expects production to reach around 130,000 BOEs per day, potentially exceeding its production guidance for the year. Additionally, the company highlighted a lifting cost reduction to $4.4 per BOE and capital expenditures of $351 million.
In summary, Vista Oil & Gas delivered a strong earnings call, highlighting impressive production and financial growth. However, concerns about free cash flow and declining oil prices remain. The company’s forward-looking guidance suggests continued growth and potential to exceed production targets, making it an interesting prospect for investors.