Vista Energy SAB de CV (VIST) 2021 Q3 法說會逐字稿

Good day, and thank you for standing by. Welcome to the Vista Third Quarter 2021 Results Conference Call. (Operator Instructions)

I would now like to hand the conference over to your speaker today, Alejandro Cherñacov. Please go ahead.

Thanks. Good morning, everyone. We are happy to welcome you to Vista's Third Quarter 2021 Results Conference Call. I am here with Miguel Galuccio, Vista's Chairman and CEO; Pablo Vera Pinto, Vista's CFO; and Juan Garoby, Vista's COO.

Before we begin, I would like to draw your attention to our cautionary statement on Slide 2. 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 expectations contemplated by these remarks.

Our financial figures are stated in U.S. dollars in accordance with International Financial Reporting Standards. However, during this conference call, we may discuss certain non-IFRS financial measures, such as adjusted EBITDA. Reconciliations 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, Vista Oil & Gas, is a sociedad anónima bursátil de capital variable organized under the laws of Mexico, registered in the Bolsa Mexicana de Valores and the New York Stock Exchange. The tickers of our common stock are VISTA in the Bolsa Mexicana de Valores and VIST in the New York Stock Exchange. The ticker of our warrant is VTW408A.

I will now turn the call over to Miguel.

Thanks, Ale. Good morning, everyone, and thank you for joining this earnings call. I am delighted to share with you our results of the first (sic) [third] quarter of 2021, during which we have continued our profitable growth path and recorded positive free cash flow. During Q3 2021, total production averaged 40,300 BOEs per day, a 59% increase year-over-year. Oil production was up 77% year-over-year, boosted by our development in Bajada del Palo Oeste, where we have already tied-in 60 new wells year-to-date.

Total revenues in Q3 2021 were $175 million, a 150% increase year-over-year, mostly driven by the increase in oil production and stronger realized oil and gas prices. Lifting costs per BOE was $7.3 for the quarter, a 26% reduction year-over-year, reflecting the low marginal cost in Bajada del Palo Oeste continued to dilute our fixed cost base.

Adjusted EBITDA was $102.9 million, implying a solid adjusted EBITDA margin of 59%. Capital expenditure for the quarter was $74.1 million, in line with execution of our 2021 guidance and reflecting the completion of our 4 pads for the year in Bajada del Palo Oeste.

During Q3 2021, we generated positive free cash flow of $51 million, driven by robust cash flow from operations and our A&D transactions.

Cash at the end of the period was $266 million. Net debt stood at $337 million, implying a healthy net leverage ratio of 1.1x adjusted EBITDA.

We will now deep dive into the main operational and financial metrics. Total production during Q3 2021 was 40,300 BOEs per day, up 59% interannually. Production growth continues to be driven by our flagship development in Bajada del Palo Oeste, where we tied-in 3 pads in the first half of the year. We also tied-in a 4 pad, #9, in late September. This pad landed 2 wells in La Cocina and 2 wells in the Organico, with an average length of 3,078 meters per well and 61 average stages per well. Note that this pad did not contribute with production during the quarter.

Given the high oil mix in Bajada Palo Oeste wells, we see a higher growth of oil production rate, which increased 77% year-over-year. During Q3 2021, we also tie-in a gas well in Entre Lomas concession, targeting the Punta Rosada Formation. This well is driving our sequential gas production growth, capturing high realization prices in the winter with a small CapEx and delivering on our planned gas commitments.

Total revenues in Q3 2021 were $175 million, a strong interannual increase driven by the boost in oil production and realized oil prices. Realized oil prices for the quarter averaged $57 per barrel, up 46% year-over-year and 4% quarter-over-quarter.

Sales to export markets accounted for 18% of the oil volumes, with sale contracts signed with Brent was trading around $72 per barrel. We still see pricings of our exported oil with discounts to Brent of less than $2 per barrel. The domestic market accounted for 82% of our total sales in the quarter, with crude oil prices of approximately $55 per barrel.

We continued to execute our strategy of building a sale book early on to locking revenues and fund investment activities. Our entire Q4 oil sale volumes with approximately 30% of export volumes have already been locked-in at an average realized price of around $60 per barrel.

Realized gas prices increased 89% year-over-year to $4.1 per million of BTU, boosted by the gas plan winter price of $4.1 per million of BTU, applicable to approximately 67% of our total volumes. Additionally, industry prices increased from $2 per million of BTU to $4.3 year-over-year.

Moving to Slide 6. We will have a look at our lifting cost performance. Total lifting cost for the quarter was $27.2 million. We have managed to maintain lifting costs virtually flat quarter-over-quarter despite peso's FX appreciation in real terms.

Lifting cost per BOE was $7.3, down 26% year-over-year as incremental production from Bajada del Palo Este continues to absorb our fixed cost base. Sequentially, we maintain flat lifting costs per BOE with a stable production.

Adjusted EBITDA for Q3 2021 stood at $102.9 million. We have quadrupled adjusted EBITDA interannually, reflecting a boost in revenues amid a stable lifting cost. Adjusted EBITDA stood flat vis-a-vis the previous quarter, even though it does not include operating income generated by the JV with Trafigura, which added approximately $5 million in Q2 2021. Our adjusted EBITDA margin and netback have remained strong in the quarter at 59% and $27.8 per BOE, respectively.

Moving to Slide 8, I will review our financial situation. During Q3 2021, we have another positive free cash flow quarter for a total of $51 million. Cash flow from operating activities was $110 million, 6x higher than in Q3 2020. Cash flow used in investing activities was $79.3 million, partially offset by the cash received through the acquisition of ConocoPhillips Argentina operation and the divesture of CASO to Shell for a net of $58.9 million recorded for the quarter.

Cash flow used in financing activities was $22 million. Debt stood at similar levels, and we pay interest for $25.5 million, including the semiannual payment on our syndicated loan and the full interest cost to date of (inaudible) strategies that were canceled during the quarter.

In Q3, we repaid a total of $112.1 million in loans and dollar-denominated bonds. We also raised the equivalent of $110 million in the Argentine capital markets in 2 dollar-linked bonds. Series XI was $9.2 million bullet during -- in 4 years with a coupon of 3.48%. Series XII was $100.8 million, amortizing, due in 10 years with a coupon of 5.85%. This issuance constitutes a robust step to prefinance 2022 maturities. Also, the average debt duration has increased from 1.4 years at the end of Q2 2021 to 2.7 years at the end of Q3 2021.

Net leverage ratio has decreased from 1.7x adjusted EBITDA at the end of the previous quarter to 1.1x adjusted EBITDA at the end of Q3 2021, reflecting how cash flow from operation is driving organic deleveraging.

Moving to the business development front. On September 16, we acquired a 50% working interest in the Aguada Federal and Bandurria Norte concessions from ConocoPhillips. Vista made no upfront payment, with control of the acquired entity that has $6.2 million in cash and assumed the outstanding investment carry of $77 million due to Wintershall, 50% JV operating partner of the block. We also obtained from the seller a 5-year bullet line of credit of $25 million available for 24 months at LIBOR plus 2%.

The rationality for this transaction is strong as this asset fits perfectly into our development strategy. The price of $2,800 per acreage is low compared to the recent Vaca Muerta M&A transactions. Through this deal, we expand our portfolio of development wells, adding approximately 150 new well locations. We expect to contribute our Vaca Muerta expertise and low-cost operating track record to the JV.

Finally, the proximity to Bajada del Palo Este of the purchase asset, in particularly Aguada Federal, could lead to important synergies in terms of contractors, treatment facilities and logistics. In short, through this transaction, we have added core assets to our portfolio without stressing our balance sheet and strongly contributing to our growth potential and shareholder's value creation.

During Q3 2021, we also made good progress on the ESG front. We are currently executing 3 projects aimed at reducing 100,000 tons of CO2 equivalent on an annualized basis. We expect to achieve a 30% reduction in our emission intensity to approximately 29 kilos of CO2 equivalent per BOE in 2021. This leaves us in a good starting point to continue reducing emissions intensity during 2022.

In the meantime, we continued to work on our long-term greenhouse gas reduction goals. During Q3, we have identified material projects in order to build our decarbonization plan. We are currently finalizing our carbon abatement cost curve, which is the cornerstone of our multiyear action plan to reduce greenhouse gas emissions and set corporate reduction goals.

Moving to Slide 12. I will present our revised guidance for the year, which has improved on the back of strong execution and higher realization prices. Note that the updated guidance of this slide is compared against the guidance issued in the previous quarter, which was an improvement compared to the original guidance from 2021.

We have already tied-in 16 wells during the year, and we are on the track to tie-in the fifth pad of the year for a total of 20 wells by year-end. We shall finish drilling this pad and we'll start completion in November. The rig has moved to a new location to drill the sixth pad of the year and is expected to deliver 4 additional drill and uncompleted wells by year-end.

As part of the decision to accelerate activity, we brought a further rig to drill surface and intermediate sections of 3 pads of the 2022 drilling campaign. We forecast this acceleration in activity will have a positive impact in our 2022 production plan.

We are confirming our revised production guidance in the range of 38,000 to 39,000 BOEs per day. Year-to-date production is 38,100 BOEs per day, and we expect the production from the 4 pads of the year, recently tied-in, to drive Q4 production to higher levels.

We are also confirming our lifting cost of approximately $7.5 per BOE for the year. Year-to-date, lifting cost was $7.4 per BOE. We forecast this metric to remain in this range in Q4 despite pressure on cost by peso appreciation in real terms that we have seen in Q3.

We are revising upwards our adjusted EBITDA guidance from $325 million to $370 million. Adjusted EBITDA has been positively impacted by additional production, higher realization prices from Q2 onwards and lower lifting cost per BOE.

Based on additional activity in Bajada del Palo Oeste, we are increasing our CapEx guidance from $310 million to $330 million. A quick comparison of the graphs at the bottom of our screen shows we are not allocating the entire increase in adjusted EBITDA to capital expenditure, reinforcing our capital discipline and focus on free cash flow generation.

Finally, we are improving our net leverage ratio guidance from 1.1 to 1x adjusted EBITDA by year-end. This reflects our successful refinancing effort during the year as well as the organic deleveraging driven by the operating cash flow generation.

Gross debt guidance increased from $500 million to $600 million at year-end, reflecting the successful 10-year tenure bond issuance in Q3 2021 at an attractive term to prefinance 2022 maturities.

To finalize this call, I will recap today's headlines. In Q3 2021, we have seen a strong performance across all key operation and financial metrics, recording a $51 million free cash flow. Bajada del Palo Oeste continues to show solid results. We tied-in our 4 well pads year-to-date, which leaves us on track to deliver 20 new well tie-ins for the year, accelerating our 2022 work program.

In terms of cash, in Q3 2021, we successfully issued $110 million in new bonds at a competitive rate, extending average debt duration to 2.7 years and prefinancing 2022 maturities.

On the business development front, we acquired 25,000 core acreage in Vaca Muerta, adding approximately 150 net new well locations to our portfolio. Finally, as shown in the previous slide, we updated our 2021 guidance on the back of a strong year-to-date performance.

Before we move to Q&A, I would like to announce that we called for the shareholder meeting scheduled for December 14. In this meeting, we will initiate the process to seek formal approval for a potential share buyback program or dividend payment in early 2022.

Today, we are announcing Vista's first Investor Day, scheduled to take place on December 9 and hosted by the executive team. During this event, we will present our updated strategy and new near term targets.

I will now take a moment to thank our investors for their continued support and interest in our story and a special thanks to all the talented people that work at Vista for their extraordinary commitment to our company.

And with that, operator, please open the line for Q&A.

(Operator Instructions) Our first question comes from the line of Walter Chiarvesio from Santander.

Congratulations for the good results and performance in the year and the quarter. I have 3 quick questions. The first one is regarding the dynamics between the exports of oil in Argentina and the local sales, I would say. Basically -- or in particular, why would you -- or why couldn't you export more in order to increase the average price that you are receiving? That is my first question.

The second question is, what would you expect with the oil price -- the local oil price if we have the devaluation of the currency next year, especially in the case of a discrete increase in the price of the dollar?

And the last one is, what I saw is that you are planning to drill 4 new wells in the fourth quarter that is not completed but will be completed in the first part of 2022. Is that correct? This is my question. So those are my 3 questions.

Let me start first with the pricing related to exportation. That probably is more of a big picture question. So it's up to -- from a very -- I would say, an overview on a big picture happened in Argentina with the prices. As you know, the prices in Argentina that we are receiving is a combination of the local price with the export price of the volume that we export.

Now I think the important thing here to understand is that, that volume that we export, it depends on how much Argentina overall produce. Today, Argentina is different where we were probably 8 or 7 years ago. We are clearly in a path of being -- having no problem in fulfilling the demands of the local market and becoming year-by-year a bit more of a net exporter.

When you look at the situation, you have the capacity of the refineries top up. So we are not building any new refinery in Argentina in the near future. Therefore, the demand and our capacity to produce gasoline for the country is top. And everything that we produce in excess, it go to the export market.

Now when you look at what we have produced here today in excess in 2021, we have increased our production 70%. From that 70% production, 31% comes from Vaca Muerta. And conventional fees have declined 1%. So saying all that, what I'm saying is today we are not in a situation of scarcity that we used to be in Argentina when we have to import oil. Our domestic market is fulfilled. And everything that, Walter, we produce on the top, it goes to the export market.

Now going to the export market, we -- first of all, the local price today, our realized price, has been around 55. We have not seen -- we have seen prices increase during the year, but we have not seen prices increase during the last few years, and we have seen the international pricing going up. So today, we have an issue, and the issue is that we are -- due to a couple of -- the export parity, and we believe we will have a correction.

In electionary years, no matter what government is in charge, we have always seen a delay on the transfer of pricing to the pump. I believe after elections, we should see a movement coming from the integrated players in the country.

When it comes to the export, well, we see really the pricing that we are realizing, as you know, fully aligned with the export -- with the Brent prices and with a discount, the discount that we know. We have a discount on quality that the last tender that we had was less than 1. And we have the export tax. And that gives you 10%, 11% reduction on the Brent pricing. And we've been very successful basically tackling that market.

When you look at 2020 and 2021, we did have additional cargoes that we export this year. And for us, that portion represents today 30% of our production for the year. So that means 30% production of our production of the year we have allocated to the export market. So that's your first question.

Let me go to the second question related to drilling plan in Q4. So we finished drilling our fifth pad of the year, is what we call -- or what you're seeing in our maps for you guys is pad 10, with an average lateral length of 2,100 meters, currently is starting completion. We plan to tie-in this well in Q4, most likely will be December.

We are then moving the drilling rig to a new location, and that is pad 6 of the year, so our 6 pad of the year. And that is expected to -- this rig is expected to deliver 4 additional drilled and uncompleted wells by year-end, okay? So that wells are going to be completed in 2022.

Also, we brought a further rig to drill surface and intermediate sections for 3 pads, and that is already on today starting to drill our first pad. That is more related to the campaign -- the drilling campaign of 2022. And the idea of that is to accelerate activity. And that, for sure, will have a positive impact in our production plan in 2022.

Going for your last question related to the devaluation impact. Well, we've been through that before. The devaluation impact have usually in Argentina a positive impact on the CapEx, a positive impact on the lifting costs because dilute our pesos part in dollars when it comes to basically cost of both development and lifting. And it has a negative impact historically in our top line because we see a spike of devaluation or a drop on the top line that is difficult to transfer at the same moment instantaneity into the pump. Usually it takes a few months to recover. I think before seeing a devaluation, we need to see a recovery in our price -- pricing in the pump. And that -- I mean, if we have a devaluation effect, clearly we hit our top line and it's going to benefit us on the cost side.

So Walter, I hope I have answered your questions.

Our next question comes from the line of Regis Cardoso from Crédit Suisse.

Congratulations on the results. Two questions from my side. First one is regarding the left slide on the presentation where you talk about distributions, either in the form of dividends or buybacks. How do you -- I mean, how do you envisage that capital allocations between accelerating the development of Vaca Muerta given that you still have a very substantial inventory of wells in Bajada de Palo and you acquired additional assets, so you have plenty to do in your existing assets. At the same time, of course, shares have been very undervalued as a result of the very high discount rates in Argentina and so on. So of course, the buyback would also make sense from that perspective.

So my question really is, how do you balance that view? Is that the additional -- the marginal cash generation that you will use? Do you need to set some money or some cash aside for servicing the debt because you might not have access to dollars because of capital restrictions -- foreign capital restrictions in Argentina? So if you could comment on what are -- how do you balance capital allocation? Where do you get the resources from given the capital flow restrictions? And how do you balance between distributions and reinvesting in the existing assets?

So that's one of the questions. I'll go ahead with the second one. Just very briefly, it's something you already touched on. But when we think of the spread between Brent prices and realized oil prices in Argentina, what do you think are the discussions that are still open? Is there anything in the hydrocarbon level that could change that spread? Is it still mostly the dynamics of whether the refineries are able to pass it through? Is it something that you believe you will develop more of an export market for your oil? I mean, can you actually reduce that spread between realized oil price and Brent prices?

And your first question is probably -- it helps me to set up the stage for really the detailed discussions that we are going to have in our Investor Day in December. But it's a very good question, and let me touch briefly on that.

So first of all, the -- I will say the important thing or the most important thing is that our operation and the results of our operation, basically, our performance in terms of cost lifting and planned development, that you know we have managed to take the operation from the 30-plus plus that we were all the way down to probably 14, between 7 of development cost and lifting costs due to the performance of our operation and also performance of our reservoir in terms of a strategy for completion, high-intensity fracking and the placement of the well and also on the strategy of [cube] that we have to have an operation that generate consistently, and that is very important, positive free cash flow. And we are now at that stage.

How we think that utilization of this pretty positive cash flow going forward, as you said, in the environment that we are, okay, with all the positive and the constraints as well evolve, first of all, we have the ambition and we plan continue growing, okay? We are a growing company and we will continue growing at double-digit rate, not only in production, but more importantly in profit and EBITDA. So that is our main priority.

Now with the free cash flow that we plan to have, I mean, we believe we can do more than that. And the second thing that you will see that we will address, I will say, at the normal pace is to use that cash flow that we have to deleverage the company, okay? And it's not that we have a problem of leverage today. We will probably end up the year at 1 of ratio net debt versus EBITDA, or probably lower, okay? But I think it's a good policy for us now we are having that cash is to continue deleveraging the company.

And on second or third, the way that we think about distribution, we see the distribution a total return to shareholders, okay? And that total return on shareholders can be in 2 forms, okay? One, it could be a plan to buy back shares. Today, it probably makes a lot of sense. And second, it could come a point of time that we could have a dividend policy. We have not made a decision on that. But when we have made a decision on -- and that's why we are preparing our holding company to receive this new positive results from Q4 onwards is to be able to distribute in one of those forms part of our free cash flow that we are generating, okay? So that is for your first question.

Brent to realized prices, again, I think it's back to the previous question of Walter. It will be depend -- I mean, in this basket -- it will depend on our ability as an industry to continue growing as an industry and as a country because it's needed for the industry, it's needed for the country as well to moving -- to continue growing our production base. Therefore, to have more excess of barrels to export. I think this is the name of the game for Argentina.

Diesel carbon law -- (inaudible) hydrocarbon law that -- I don't think is touching in the local prices. It was originated to address part of the constraints that we have that you mentioned. And you know, distribution of -- cross border -- I would say, cross-border, be able to move, proceed to a border in a country today that we are exporting. And what -- on the other hand, we continue needing investments because in order to grow our production base, we continue to need investment, and we need more Vistas and more companies coming to Argentina. So I think that was the origin of the idea of having a law that incentivized that investment.

I think if the law addresses that, I think we are winning something. For that, you don't need more than 4 articles in the law. Today, we are discussing 100. I think that is a bit too much, okay? Not needed. We have a law that we passed in 2014 that it has been working extremely well in terms of the legal framework of the hydrocarbon law. What we need is 4 articles in the law to incentivize investment, to grow production, to create work for the country and to become a real and serious net exporter in a country that we have that potential. If we got law with those 4 articles, address that, it will be a good thing that this government does.

Our next question comes from the line of Guilherme Levy from Morgan Stanley.

My questions are externally related to the newly acquired acreage from ConocoPhillips. So I just wanted to understand how should we think about investments in these new blocks that are operated by Wintershall? How does the operator think about production ramp-up into the coming years and the drilling campaign at those areas? And also, if you could comment on the expected attractiveness and productivity of those areas, comparing those with what we have seen at Bajada del Palo Oeste?

Well, look at -- first of all, you said that it was a very good acquisition for us. Both blocks, Aguada Federal and Bandurria Norte are concessions that we know extremely well. We were in the process at the time that ConocoPhillips bought in those areas. So for us, it's nothing new. The fact that we have managed to make a transaction, we know that from payment. And even stuff they -- assuming then the outstanding investment carry that we shall have there, I think it was a very good deal.

The asset fits, first of all, perfectly our strategy because it's not only the high-quality asset, also our neighbor asset to our operation, would have very strategic value for us, particularly I will say Aguada Federal. With Wintershall, we have a very good relation on all levels in the company, at the operational level and also at the top. We have discussed already -- I have discussed with Mario, and the idea is to cooperate and collaborate in the plan for 2022.

What is the plan? We are just starting technical discussion. Clearly, it's a lot we can add on that technical discussion. It's not new for the country, neither for you guys, that as an operator today, we rank between the most efficient operation of the basin, and therefore, of course, we have (inaudible).

And the way that the structure of the JV, of course, we have a saying on the program for 2022. So we, together, will have to agree what exactly is that program that we are going to implement. So we are on that discussion. I don't think yet we have a clear program for next year.

The other question was -- sorry, Guilherme. I mean, you have another question or not? Because I thought that I answered that.

Our next question comes from the line of Andres Cardona from Citigroup.

Congratulations for the results. Most of my questions have been asked, but I still have 2. Miguel, maybe you can comment about the cost of pad #9. And also, if you have some visibility about realization prices for the fourth quarter, if you have keep your strategy of selling in advance because it has been very good guidance over the last couple of quarters? So that will be from my side. And again, congratulations on the results.

And yes, let me tell you first about pad 9. So we complete and tie-in pad 9 in September, okay? We land 2 wells in La Cocina and 2 wells in Organico. The average lateral length, if you remember properly, was close to 3,100 meters, and we placed 61 average stages per well. So that was -- I mean, operationally, we went even further than we used to go. And also, we managed to place in average more stages than we used to do. And that was part of the plan.

Yes, indeed, we have a sidetrack in one of the wells, so we drilled 3 wells without issues. And we have one well of the pad that due to technical issues when we were running casing, we have to sidetrack. Basically, what we did is we recover the casing and then basically we run again with cement and we sidetracked it. This operation, the effect for the quarter, is that it basically was pushing 20 to 25 days our production, what is today of the pad around 3,000 barrels per day. And it's not fully clean. So still cleaning up. It was pushed 25 days from September to October.

Also, we have in that particular well an overrun cost. So all those wells today we are drilling in a normalized basis around $10 million. In this well, we have a $4 million additional. So that was the full impact of the sidetrack of one well in the complete pad, okay? So nothing -- I mean, we have drilled already 10 pads. The performance have been exceptional. Of course, we investigate, we do -- we proof and so on. But it's part of running an operation. So no major impact, a very slight impact in what we do. And the path forward -- I'm seeing from the production today, choke is looking good, is looking around --- well tight.

So that is your first question. Your second question was related to outlook on prices for Q4, okay. So as I mentioned in the call, in Q4, we have already locked 100% of our revenues, okay? We managed in Q4 to place 2 cargoes; that means 30% of our total volume in October 1 to be sold. Basically, that was good prices. What we have in October was Brent prices around $73. We managed to have realized price of around $66. And in December, we sold another cargo (inaudible), okay? Brent at that time was around $83, and we managed to realized prices of $76, okay? And domestic volumes were placed to basically Trafigura, YPF and others.

So that is what we have already looking for Q4. So you -- when you look at the whole thing, you should expect that the average sale prices will be around $60 per barrel for the basket.

I hope I've answered your questions, Andres.

Our next question comes from the line of Ezequiel Fernández from Balanz.

This is Ezequiel Fernández from Balanz. Thank you for taking the time to do the call and on the complete material, as always. I have 3 questions. I would like to go one by one, if you don't mind. The first one is relating to pricing. It has 2 parts. Going back a little bit to what Andres Cardona was just asking. We had some news articles in Argentina recently talking about the internal price of crude going for $60 per barrel at the moment. I don't know if you can confirm that. And that is for the lighter oil, such as the one we used to sell. And also, what was the discount versus Brent on your export sales during the third quarter?

Simply, and related to your first question on the $60 per barrel in the local market, the reality is we have not seen those prices in the local market, okay? We were probably seeing prices more today around $55. If anybody is getting $60, my congratulations to them. I think we should go to those numbers.

And as you know -- I mean, those numbers -- the local number depend mainly of many things, but one is the price of the pump and the negotiation with the refinery, okay? So we have not seen prices of $60 just blindly.

And second, in terms of the export, it's exactly what I said to -- previously, okay? You see discounts of around 10% in exports. You can basically place probably $1.5 of the $10 that you will see today to quality, okay? But depending on the tender, we see a range. And we've been very successful. Not long ago that price was around $5, okay, and we today are talking about $1, $1.5, $2.

And the other part is the [X] percent of the export tax, that, I mean, is today around another $8. So that is the discount that we are getting in export. It's very straightforward. And the only variance is the quality. And the quality of Vaca Muerta and the recognition of the quality of Vaca Muerta is a super positive story. So I mean, no difficulties when we have to export.

Again, back to the previous question, the key for us, the key for the industry, the key for Argentina is to create more volumes, to invest more in order to have more volumes going to the export. This is a win-win situation for everybody.

Great. My second question is related to income taxes. Given your investment pace during the past years, Vista has not been paying income taxes up to now, if I'm not mistaken. I wanted to get a sense if you are budgeting or thinking that you must be -- you must start paying some next year?

Yes, Ezequiel, that's correct. You can see in the balance of Vista in our statement that everything that we call current taxes is basically what we are forecasting we shall pay during next year.

Okay. Great. And my final question -- and this might be a little bit early to ask. Tell me if it's so. If you could comment a little bit of your lower carbon and ESG initiatives for next year?

Yes. Well, thank you for answering that. And I think we presented a bit of that in the presentation. We basically -- we are reducing around 100,000 tons of CO2 equivalent in annualized basis. And this is what we are doing in 2021. For next year, we expect a further reaction -- on December 9, in our Investor Day strategy, we will present exactly what we will do. We are super excited about the plan that we have, our formal plans, our CapEx assigned to that. And I think in terms of becoming a low-carbon operator, we are already low cost -- low carbon operator. I think we are reserving for December 9 the news to present there. So if you excuse me, I will -- let me hold that card in order to give it to everybody during that day. That is going to be an important day for us.

Our next question comes from the line of Konstantinos Papalias from Puente.

Congratulations on your results. This has clearly been quite a fruitful call. I have 2 quick questions for you. The first one is for you. The first one is a following regard -- a follow-up regarding on dividends, just to make sure, how are you planning on paying dividends if this is a decision reached by the shareholders' meeting. Is there a need for authorization from the Argentine central bank to actually distribute dividends?

And my second question is regarding what's the net leverage for the next year or so. What could you expect in terms of net leverage for 2022 or 2023? Does it make a difference if you decide to accelerate production growth? And if so, are you considering accessing the international market to obtain funds to boost your strategic plan?

And again -- I mean, we are (inaudible) that we -- for sure we will cover in December 9 with a full executive team. Now -- but to what we discussed before, I mean, the positive thing is that we are creating consistently positive cash flow from the operation. So back to what I said before, our first priority, because it's our story, is to continue growing and we are planning to continue growing. And we will present that plan in detail at the event in December 9. But we will continue growing and doubling this rate.

Then back to your second question, we -- when you look at our reduction from the point of view of net debt versus EBITDA, we've been coming down. We are landing in one this year, what is a super number. And I believe you will see a further reduction in 2022.

Now besides that, we are planning to use part of the cash to deleverage our absolute number of debt, okay? So you should expect that part of the cash we have that use. Of course, there's a caveat there, I mean, and for everything that we do with cash is our FX restrictions. That is something that we don't have control, okay, and it's something also that can change from 1 year to other in Argentina, and we will adapt to that.

And the third element of cash is distribution. We think in total shareholder returns, okay? That is how we think. So that distribution is not necessarily dividend. It could be dividends, but also could be share buybacks, okay? Whatever makes more sense to our shareholder in -- and basically, whatever makes more sense to Vista, okay? So we are not talking about this dividend. We are talking that the portion of the cash is going to be distributed as a total shareholder return.

At this time, I'm showing no further questions. I would like to turn the call back over to Miguel Galuccio for closing remarks.

Well, thank you very much, gentlemen and ladies. Another great quarter for us. And I just thank you for the support and for continue being aside us and I'm looking forward to see you in December 9 on our Investor Day, where we will give you an update on the strategy of Vista going forward. Thank you very much. Have a good day.

This concludes today's conference call. Thank you for participating. You may now disconnect.