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01/11 03:34
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The company reported strong financial performance with a 52% increase in total revenues and a robust 83% share price increase over the year. Despite some concerns about production delays in Q1 2025, the overall guidance remains optimistic with significant production ramp-up plans for later in the year. Additionally, the company maintains a solid financial position with a low net leverage ratio and plans for continued growth in Vaca Muerta. These factors, along with a sizable share repurchase program, suggest a positive outlook for stock price movement.
Total Production (Q4 2024) 85.3 million boe per day, an increase of 51% year-over-year and 17% quarter-over-quarter, driven by new well activity in Vaca Muerta.
Oil Production (Q4 2024) 73.5 million barrels of oil per day, up 52% year-over-year and 16% quarter-over-quarter, reflecting increased well activity.
Total Revenues (Q4 2024) $471 million, a 52% increase year-over-year, driven mainly by oil production growth.
Lifting Cost (Q4 2024) $4.7 per boe, almost flat quarter-over-quarter, with an 8% year-over-year increase due to inflation and increased oilfield expenditures.
Capital Expenditure (Q4 2024) $340 million, driven by drilling and completion of wells and development facilities.
Adjusted EBITDA (Q4 2024) $273 million, 5% lower year-over-year; excluding the impact of export proceeds repatriation, it grew 27% year-over-year.
Net Income (Q4 2024) $94 million, with an adjusted net income of $22 million after deducting deferred income tax.
Free Cash Flow (Q4 2024) $57 million, reflecting strong operational cash flow.
Net Leverage Ratio (Q4 2024) 0.63 times adjusted EBITDA, indicating a solid financial position.
Adjusted EBITDA (Full Year 2024) $1.1 billion, a 25% increase year-over-year, supported by production growth and cost control.
EPS (Full Year 2024) $5 per share, an 18% increase year-over-year, reflecting solid bottom line performance.
ROACE (Full Year 2024) 24%, negatively impacted by $600 million of debt issuance; without this, it would have been closer to 30%.
Share Repurchase (Full Year 2024) $100 million at an average price of $48 per share, reflecting strong financial performance.
Share Price Increase (Full Year 2024) 83% increase from year-end 2023 to year-end 2024, reflecting market recognition of performance.
New Well Activity: Increased from 31 new wells in 2023 to 50 new wells connected during 2024.
Oil Treatment Capacity: Upgraded oil drilling plants to a capacity of 90,000 barrels of oil per day.
Pipeline Expansion: Completed expansion of the Oldelval pipeline, now ramping up to full capacity.
Oil Exports: Exported 10.6 million barrels of oil in 2024, 29% above 2023, generating $748 million in net revenues.
Domestic Sales: 1.1 million barrels sold in the domestic market at export parity prices.
Production Growth: Total production increased to 85.3 million boe per day, a 51% year-over-year increase.
Lifting Cost Efficiency: Lifting cost per boe was $4.7, reflecting a focus on operational efficiency.
Greenhouse Gas Emissions: Reduced total Scope 1 and 2 emissions by 28% compared to 2023.
Drilling Capacity: Secured three drilling rigs and two frac sets to support production growth.
Financial Strategy: Repurchased $100 million of company stock at an average price of $48 per share.
Competitive Pressures: The company faces competitive pressures in the oil market, particularly with fluctuating international prices affecting realized oil prices, which were down 1% year-over-year and 2% sequentially.
Regulatory Issues: The company operates under the laws of Mexico and is subject to regulatory changes that could impact operations and financial performance.
Supply Chain Challenges: Increased trucking expenditures due to higher volumes impacted sales expenses, with an increase of $25 million on a sequential basis.
Economic Factors: Inflation in U.S. dollars has affected peso-denominated contracts, contributing to increased lifting costs by 8% year-over-year.
Debt Management: The issuance of $600 million of debt negatively impacted ROACE, which would have been closer to 30% without this effect.
Operational Risks: The company has ramped up production activities, which may lead to operational risks if not managed effectively, especially with the increase in new well connections.
Production Growth: Achieved a 36% increase in total production, reaching an average of 69.7 million boe per day in 2024.
New Well Connections: Increased new well connections from 31 in 2023 to 50 in 2024, with guidance for 52 to 60 connections in 2025.
Transportation Capacity: Increased oil transportation capacity to 37,000 barrels per day and secured additional capacity through partnerships.
Decarbonization Efforts: Reduced greenhouse gas emissions by 28% and achieved a 44% reduction in emission intensity to 8.8 kg CO2 per boe.
Shareholder Returns: Repurchased $100 million of company stock and achieved an 83% increase in share price from year-end 2023 to year-end 2024.
Adjusted EBITDA Guidance: Achieved adjusted EBITDA of $1.1 billion, above the midpoint of guidance range.
CapEx for 2025: Planned CapEx for 2025 includes funding for high-return new well activities, supported by $600 million of debt issuance.
Production Target for 2025: Updated production targets for 2025 after securing additional drilling and frac capacity.
ROACE: Reported ROACE of 24%, expected to be closer to 30% without the impact of new debt.
Share Repurchase Program: During 2024, we repurchased $100 million of company stock at an average price of $48 per share.
The earnings call highlights strong production growth, improved EBITDA margins, and increased well tie-ins, indicating operational efficiency and financial health. The Q&A reveals positive sentiment with production exceeding guidance and strategic flexibility in well tie-ins. Although CapEx slightly exceeds guidance, it supports growth. The market strategy and shareholder returns are well-received, with no major risks identified. Given the market cap, a positive stock price movement of 2% to 8% is likely over the next two weeks.
The earnings call presents mixed signals. The acquisition of Petronas Argentina and production growth are positive, but the removal of 2025 market guidance and a decline in realized oil prices are concerning. The Q&A reveals a cautious approach to future operations, potential free cash flow issues, and a lack of detailed guidance, which may worry investors. The market cap suggests moderate volatility, leading to a neutral stock price prediction.
The earnings call reflects strong financial performance with significant production growth and improved EBITDA margins. The acquisition of Petronas Argentina is expected to enhance EBITDA and margins further. While there are concerns about debt management, the overall sentiment from the Q&A suggests confidence in synergies and production growth. The removal of 2025 guidance due to the acquisition could be a potential concern, but the strong operational metrics and strategic moves outweigh this, indicating a positive outlook for the stock price over the next two weeks.
The company reported strong financial performance with a 52% increase in total revenues and a robust 83% share price increase over the year. Despite some concerns about production delays in Q1 2025, the overall guidance remains optimistic with significant production ramp-up plans for later in the year. Additionally, the company maintains a solid financial position with a low net leverage ratio and plans for continued growth in Vaca Muerta. These factors, along with a sizable share repurchase program, suggest a positive outlook for stock price movement.
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