Vista Oil & Gas, S.A.B. de C.V. — FY 2019 Form 20-F
Reporting period: Fiscal year ended December 31, 2019; annual report filed April 29, 2020. The filing is an annual report, not a standalone fourth-quarter filing. Figures are in U.S. dollars unless indicated. Financial statements are audited and prepared under IFRS.
Business context
Vista is an independent oil and gas exploration and production company operating primarily in Argentina, with smaller interests in Mexico. Most production, reserves and operating assets are in Argentina’s Neuquén Basin. The company’s strategy combines cash flow from conventional assets with development of its Vaca Muerta shale acreage.
Key financial and operating metrics
| Metric | FY 2019 | Comparator / context |
|---|---|---|
| Revenue | $416.0 million | $331.3 million for the 2018 Successor Period, April 4–December 31; periods are not directly comparable. |
| Gross profit / margin | $87.8 million / 21.1% | 2018 Successor Period: $118.8 million / 35.8%. |
| Operating profit / margin | $14.6 million / 3.5% | 2018 Successor Period: $57.2 million / 17.3%. |
| Net loss | $32.7 million; $0.409 loss per share | 2018 Successor Period: $26.4 million loss; not a full-year comparison. |
| Adjusted EBITDA and margin | $170.9 million / 41% | Non-IFRS measures; management’s adjustments include D&A, finance results, taxes and specified items. |
| Cash flow | Operating +$134.3 million; investing −$235.0 million; financing +$266.3 million | Investing outflows principally reflected $240.3 million of property, plant and equipment purchases. |
| Cash and liquidity | $260.0 million cash, bank balances and short-term investments; $234.2 million cash and cash equivalents | Current assets $372.6 million; current liabilities $193.0 million; reported liquidity index 1.93. |
| Debt | $451.4 million borrowings; $191.4 million Net Debt | Net Debt subtracts cash, bank balances and short-term investments. Including lease liabilities, net debt was $208.2 million. |
| Capital expenditure | $224.1 million | 99% invested in Argentina; includes $150.2 million in Vaca Muerta development. |
| Production and reserves | 29,112 boe/d average production; 101.8 MMboe proved reserves at year-end | Production increased 19% from 24,470 boe/d in 2018; reserves rose 77% from 57.6 MMboe, chiefly from Bajada del Palo Oeste. |
Oil represented 81.3% of revenue, natural gas 17.2% and NGL 1.5%. Average realized oil price fell to $53.0/bbl from $67.2/bbl in the 2018 Successor Period; gas fell to $3.3/MMBtu from $4.6/MMBtu. Operating expense declined to $10.8/boe from $12.8/boe, while D&A rose to $153.0 million from $74.8 million.
Material changes and comparability
- Vista’s consolidated reporting began with the April 4, 2018 Initial Business Combination and purchase accounting. The 2018 Successor Period covers only April 4–December 31; predecessor results cover a separate January–April period. The company cautions that these periods are not directly comparable with FY 2019.
- Revenue growth in 2019 reflected higher production, including Vaca Muerta shale output, partly offset by lower realized oil and gas prices. The filing attributes $52.6 million of 2019 revenue to predecessor-reporting treatment, further limiting direct comparisons.
- Gross and operating margins declined versus the 2018 Successor Period. Higher D&A, selling costs and general and administrative expenses weighed on operating profit; higher interest expense also affected earnings.
- Vista adopted IFRS 16 on January 1, 2019, recognizing right-of-use assets and lease liabilities; year-over-year comparisons may be affected.
Outlook, risks and unusual items
- COVID-19 and oil-market shock: By the April 2020 filing date, Vista had stopped drilling and completion activity in Bajada del Palo Oeste and shut in 12 shale wells, about 30% of total production. Management reported March realized oil prices of $24.6/bbl, limited visibility on restart timing, and a crude-oil storage vessel arrangement for about 300,000 barrels.
- Management was reducing and deferring 2020 capital, operating and administrative spending to preserve cash. It warned that lower prices and production could reduce revenue, Adjusted EBITDA and operating cash flow, trigger impairments, weaken covenant ratios or hinder supplier payments. The filing provides no clear numerical 2020 earnings or production guidance.
- Argentina exposure includes peso depreciation, high inflation, exchange controls, export duties, potential price intervention and regulatory uncertainty. The peso depreciated about 58% against the U.S. dollar in 2019; CPI inflation was 53.8%.
- The syndicated loan contains financial and operating covenants, including leverage and interest coverage tests. Vista reported no default or covenant breach at December 31, 2019; future compliance remained a stated risk.
- Unusual and subsequent items: Vista issued $50 million bonds in July and another $50 million in August 2019. After year-end, it issued a further $50 million four-year bond in February 2020 and completed the purchase of the other Aleph Midstream investors’ interests for $37.5 million on March 31, 2020.
- Vista reported no dividends declared for 2019 and stated it had paid no dividend since incorporation. It reported disclosure controls effective at year-end; management’s Section 404 internal-control assessment was not included because of the applicable transition period.
Most important facts for investors to verify
- Reconcile the $451.4 million borrowings, $260.0 million liquidity balance, $191.4 million company-defined Net Debt and $208.2 million net debt including leases; review maturities, interest rates and covenant headroom.
- Assess how much of the 101.8 MMboe reserve base—and related cash flow—depends on undeveloped Vaca Muerta reserves, assumptions and planned investment.
- Verify the effects of oil-price weakness, shut-in wells, storage and spending reductions on 2020 production, realized prices, cash generation and committed concession investment.
- Review the concentration of oil sales: Raízen/Shell and Trafigura together accounted for 98% of 2019 oil revenue; assess customer, receivables and price exposure.
- Confirm treatment and timing of Argentine export duties, exchange controls, price rules and any changes in gas incentives or concession obligations.
- Distinguish IFRS results from Adjusted EBITDA and Net Debt, and account for the short, acquisition-affected 2018 Successor comparison period.