Business Context and Reporting Period
Vista Oil & Gas, S.A.B. de C.V. filed this Form 6-K for January 2022. On January 17, 2022, the company announced an agreement, effective January 1, 2022, to acquire an additional 50% operated working interest in the Aguada Federal and Bandurria Norte concessions in Argentina’s Vaca Muerta shale oil play. The transaction would make Vista the operator and sole concession owner, subject to regulatory approval.
Transaction and Key Metrics
- Purchase price: US$140 million, consisting of US$90 million payable on or before January 18, 2022, and US$50 million payable in eight equal quarterly installments beginning in April 2022.
- The transaction cancels US$77 million of carry consideration assumed when Vista acquired the initial 50% interest on September 16, 2021.
- Vista will acquire 25,231 net acres, increasing its total Vaca Muerta acreage to 183,084 acres.
- The assets add up to 150 new well locations to Vista’s portfolio, bringing the company’s identified Vaca Muerta locations to up to 850.
- Aguada Federal covers 24,058 gross acres and produced 718 barrels of oil equivalent per day in the third quarter of 2021. Six horizontal wells had been drilled, all of which demonstrated hydrocarbon production.
- Bandurria Norte covers 26,404 gross acres. Four horizontal wells had been drilled, all of which demonstrated hydrocarbon production before being shut in during 2019.
- No proved reserves were booked for either concession at year-end 2020, according to the filing.
- Both concessions expire in 2050 and had no remaining investment commitments as stated in the filing.
Material Changes Versus the Prior Comparable Period
This filing does not report quarterly or annual comparative financial statements. The material change disclosed is Vista’s planned increase from a 50% interest to full ownership and operation of the Aguada Federal and Bandurria Norte concessions, together with the associated acreage, drilling inventory and payment obligations.
Outlook, Commentary, Risks and Contingencies
Management characterized the acquisition as an opportunity to expand Vista’s position in Vaca Muerta and capture operational synergies. Vista stated that it plans to apply its operating model focused on efficiency, safety and sustainability.
Closing remains contingent on the Province of Neuquén issuing a decree approving the assignment of the assets to Vista. The filing provides no production forecast, reserve estimate, earnings guidance, margin outlook or expected return for the acquired assets.
The filing includes customary forward-looking statement warnings. Actual results may differ materially because of known and unknown risks, uncertainties and other factors described in Vista’s SEC and Mexican regulatory filings.
Important Facts for Investors to Verify
- Whether and when the Province of Neuquén approved the concession assignment and the transaction formally closed.
- Vista’s funding source and liquidity impact from the US$90 million initial payment and subsequent quarterly installments.
- The final accounting treatment, including cancellation of the US$77 million carry consideration.
- Updated production, reserves, well economics and development plans for Aguada Federal and Bandurria Norte.
- The status of the previously shut-in Bandurria Norte wells and any additional capital or operating requirements.
- Any changes to concession terms, regulatory obligations or project risks following closing.