Monday, October 7, 2024
Perfil

ECONOMY | 01-03-2021 14:29

Vaca Muerta: Shale driller Vista emerges as a leading producer

Vista Oil & Gas has become one of the largest oil producers in the shale-rich Vaca Muerta basin, and is aiming for further growth in 2021.

From just a company with no operational activity four years ago, Vista Oil & Gas has become one of the largest oil producers in the shale-rich Vaca Muerta basin, and is aiming for further growth in 2021.

On Friday, the firm announced it would increase spending this year to at least US$275 million, or 23 percent more than in 2020. The company plans drilling and fracking at least 16 new wells, bringing production to the equivalent of about 38,000 barrels of oil per day.

In the fourth quarter, Vista became the second-largest crude producer in the Vaca Muerta formation, behind only state oil company YPF SA, according to the company's own calculations based on government data.

Vista's growth in the Patagonian shale region contrasts sharply with the problems faced by big oil companies like Royal Dutch Shell Plc and Exxon Mobil Corp, which are constrained by the government’s capital controls.

In "2021, we will really reap everything that we have done in terms of lifting restructuring costs," said the firm’s CEO Miguel Galuccio, during the company's fourth-quarter earnings call.

Vista is focused on increasing production at its crown jewel, the Bajada del Palo Oeste block. Costs have been reduced to US$9.9 million per well, from US $17.4 million two years ago.

The company hopes to generate free-cash-flow next year, and what to do with that money is a question that management is excited to solve, said Galuccio, who led the first forays into Vaca Muerta when he was YPF's chief operating officer. For now, acquisitions are off the table, added the CEO.

Argentina’s government is actively involved in the energy markets, and the Cronista newspaper reported on Friday that refineries, whose prices at the pump are subject to controls, are pushing to fix oil sold in the country at US $52 to US $53 per barrel amid the global rally in crude, a move that would limit Vista's earnings.

by Jonathan Gilbert, Bloomberg

Comments

More in (in spanish)