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01/11 03:34
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
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.
Total production 127,000 BOEs per day, an increase of 74% year-over-year and 7% quarter-on-quarter. This was driven by strong productivity in new well tie-ins in Bajada del Palo Oeste and La Amarga Chica.
Oil production 110,000 barrels per day, an interannual increase of 73% and 7% sequentially. This reflects solid execution of the drilling campaign and robust well productivity.
Total revenues $706 million, 53% above the same quarter of last year and 16% above the previous quarter. The increase was driven by a strong increase in oil production, which more than offset lower oil prices.
Lifting cost $4.4 per BOE, 6% below year-over-year. This reflects a continuous focus on efficiency.
Capital expenditure $351 million, driven by new well activity during the quarter.
Adjusted EBITDA $472 million, an interannual increase of 52% and a sequential increase of 70%. This was mainly driven by production growth and the consolidation of 50% of La Amarga Chica.
Adjusted net income $155 million.
Net income $315 million, reflecting a nonrecurring gain of $288 million from the Petronas Argentina acquisition.
Earnings per share $3 and adjusted earnings per share was $1.5.
Free cash flow Almost neutral at minus $29 million, driven by higher adjusted EBITDA and a decrease in working capital.
Net leverage ratio 1.5x on a pro forma basis.
Gas production Increased 87% on an interannual basis and 9% on a sequential basis.
Oil exports Increased 84% year-over-year to 6.3 million barrels for the quarter.
Realized oil prices $64.6 per barrel on average, down 5% on interannual basis and up 4% on a sequential basis, driven by international prices.
Selling expenses per BOE Down 24% on an interannual basis, driven by the elimination of oil trucking services.
Adjusted EBITDA margin 67%, up 2 percentage points compared to the same quarter of last year as production growth and the elimination of oil trucking offset lower oil prices.
Netback $40.5 per BOE, up 8% on a sequential basis.
Cash flow from operating activities $304 million, reflecting income tax payments of $179 million, partially offset by a decrease in working capital of $43 million.
Cash flow used in investing activities $333 million, reflecting accrued CapEx of $351 million partially offset by a decrease in CapEx-related working capital of $17 million.
Cash flow from financing activities $195 million, driven by proceeds from borrowings of $500 million, partially offset by the repayment of borrowings' capital of $193 million and the repurchase of shares of $50 million.
Cash at period end $320 million.
New well tie-ins: 24 wells connected in Q3, including 11 in Bajada del Palo Oeste, 4 in Aguada Federal, and 9 in La Amarga Chica. Plans to accelerate new well activity in Q4 with 12-16 tie-ins.
Oil exports: Increased 84% year-over-year to 6.3 million barrels in Q3. 100% of oil volumes sold at export parity prices.
Production growth: Total production reached 127,000 BOEs/day, a 74% year-over-year increase. Oil production was 110,000 barrels/day, up 73% year-over-year.
Cost efficiency: Lifting cost reduced to $4.4 per BOE, 6% lower year-over-year. Selling expenses per BOE down 24% due to elimination of oil trucking services.
Financial flexibility: Secured $500 million term loan in July, enabling increased investment in new wells and production growth.
Market Conditions: Realized oil prices were $64.6 per barrel on average, down 5% on an interannual basis, indicating potential vulnerability to fluctuating international oil prices.
Free Cash Flow: Free cash flow during the quarter was negative at minus $29 million, reflecting higher adjusted EBITDA but also increased working capital and capital expenditures.
Debt and Leverage: The company has a net leverage ratio of 1.5x adjusted EBITDA, with $500 million in new borrowings, which could pose financial risks if market conditions deteriorate.
Oil Price Dependency: 100% of oil volumes were sold at export parity prices, making the company highly dependent on international oil price trends.
Capital Expenditures: Capital expenditure was $351 million, driven by new well activity, which could strain financial resources if returns do not meet expectations.
Regulatory and Tax Payments: Income tax payments of $179 million impacted cash flow from operating activities, highlighting regulatory and fiscal pressures.
Production Guidance: The company plans to accelerate new well activity in Q4, with 12 to 16 tie-ins expected, leading to a total of 70 to 74 connections for the year. Q4 production is projected to reach approximately 130,000 BOEs per day, positioning the company to potentially exceed its annual production guidance.
Revenue and Financial Outlook: The company anticipates continued revenue growth driven by increased production and higher oil realization prices. Adjusted EBITDA is expected to remain strong, supported by production growth and cost efficiency measures.
Strategic Plan Update: An updated strategic plan focusing on profitable growth, cost efficiency, and cash generation will be presented during the Investor Day on November 12.
Repurchase of shares: Cash flow from financing activities was $195 million, driven by proceeds from borrowings of $500 million, partially offset by the repayment of borrowings' capital of $193 million and the repurchase of shares of $50 million.
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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