Business Context and Reporting Period
Vista Oil & Gas, S.A.B. de C.V. filed a Form 6-K for June 2021. On June 25, 2021, the company announced that its subsidiary, Vista Oil & Gas Argentina S.A.U., agreed to sell its 10% working interest in the Coirón Amargo Sur Oeste (CASO) concession in Vaca Muerta, Argentina, to Shell Argentina S.A.
Transaction and Key Metrics
- Total consideration: US$21.5 million.
- Cash consideration: US$15.0 million.
- Infrastructure carry: US$6.5 million for extending water collection and supply infrastructure operated by Shell and used by Vista.
- Asset interest transferred: 10% working interest, representing approximately 1,644 acres of the 16,440-acre concession.
- Production: Vista’s 10% share of CASO production was 94 barrels of oil equivalent per day in 2020.
- Proved reserves: Vista’s 10% share was 1.5 million barrels of oil equivalent as of December 31, 2020, based on a report by DeGolyer & MacNaughton Corp. dated February 1, 2021.
The filing does not provide company-wide revenue, profit, cash flow, margins, debt, liquidity, or other consolidated financial metrics for the reporting period.
Material Changes and Transaction Status
The Province of Neuquén approved the amendment to the joint venture agreement through Decree 1027/2021 dated June 24, 2021. All stated conditions precedent had been satisfied, and Vista and Shell were expected to establish a closing date within five business days of the announcement. Upon closing, the transaction was to have retroactive effect from April 1, 2021.
CASO was under field development and had completed its pilot phase in 2019. The transaction will transfer Vista’s interest and associated acreage to Shell.
Guidance, Outlook, Risks and Unusual Items
- The filing contains no updated production, earnings, capital expenditure, or financial guidance.
- The transaction provides US$15.0 million of cash proceeds plus a US$6.5 million infrastructure carry, but the filing does not specify the accounting treatment, expected gain or loss, or timing of recognition.
- Completion remained subject to determining the closing date, although the filing stated that all agreed conditions precedent had been fulfilled.
- The filing includes customary forward-looking statement warnings concerning operational, financial, regulatory, market, and other risks. It refers investors to Vista’s SEC and Mexican regulatory filings for detailed risk factors.
Investor Verification Items
- Confirm the actual closing date and completion of the transfer to Shell.
- Verify receipt and accounting treatment of the US$15.0 million cash payment and US$6.5 million infrastructure carry.
- Review subsequent filings for any gain or loss, changes to reserves, production, or guidance resulting from the divestment.
- Assess the effect of removing CASO’s 94 boe/d of 2020 attributable production and 1.5 million boe of proved reserves from Vista’s portfolio.
- Review the amended joint venture agreement and the scope and value of the infrastructure works funded through the carry arrangement.