Vista Energy Q4 2023 Earnings Call Transcript

Quartr
Provided by Quartr
February 21, 2024

There are 8 speakers on the call.

Operator

Good day and thank you for standing by. Welcome to Vista's 4th Quarter 2023 Earnings Webcast. At this time, all participants are in a listen only mode. After the speakers' presentation, there will be a question and answer Please be advised that today's conference is being recorded. I would now like to hand the conference over to Visa's Strategic Planning and Investor Relations Officer, Alejandro Chernyakhov.

Speaker 1

Thanks. Good morning, everyone. We are happy to welcome you to Vista's Q4 and full year 2023 results conference call. I am here with Miguel Galluccio, Vista's Chairman and CEO Pablo Verapinto, Vista's CFO and Juan Garobe, Vista's COO. Before we begin, I would like to draw your attention to our cautionary statement on Slide 2.

Speaker 1

Please be advised that our remarks today, including the answers to your questions, may include forward looking statements. These forward looking statements are subject to risks and uncertainties that could cause actual results to be materially different from expectations contemplated by these remarks. Our financial figures are stated in U. S. Dollars and in accordance with International Financial Reporting Standards IFRS.

Speaker 1

However, during this call, we may discuss certain non IFRS financial measures such as adjusted EBITDA and adjusted net income. Reconciliation of these measures to the closest IFRS measure can be found in the earnings release that we issued yesterday. Please check our website for further information. Our company Vista is associated anonymous versati de la capital variable organized under the laws of Mexico registered in the Volca Mexicana de Valores and the New York Stock Exchange. Our ticker is Vista in the Volca Mexicana de Valores and BIST in the New York Stock Exchange.

Speaker 1

I will now turn the call over to Miguel. Thanks, Ale. Good morning and welcome to this earnings call. We have an exceptional year in 2023. We have continued to deliver strong operational and financial results with double digit growth, improved reserve, total production and adjusted EBITDA.

Speaker 1

We also secured oil misting capacity in key projects, which underpin our updated production target for 2026. Our outstanding performance was reflected by our stock price performance, which doubled during the year. I will now present our Q4 2023 results and then move on to our full year results. During Q4, we continue to focus on drilling and completion activity in Baja del Palo Oeste. This led to a sequential growth in total production, surpassing our consolidated production level prior to the transfer of the conventional asset in Q1 2023.

Speaker 1

Total production was 56,400 BOE per day during the Q4, 14% above sequentially and 60% above internally on a pro form a basis. Oil production was 48,500 barrels of oil per day, 70% above the previous quarter and 80% percentage above the same quarter of last year also on a pro form a basis. Total revenues during the quarter were $309,000,000 2% above the previous quarter. We continue reducing our lifting costs, reaching $4.3 Boe during the quarter. Capital expenditure was $212,000,000 mainly driven by 11 wells drilled and 7 wells completing during the quarter.

Speaker 1

In Q4 2023, adjusted EBITDA was $288,000,000 43% above year over year, supported by the stable revenues and other operating income growth amid lower lifting costs. Adjusted net income was $240,000,000 implying a quarterly adjusted EPS of $2.5 per share, mainly driven by higher adjusted EBITDA and the positive impact of the reduction in the full year income tax. We recorded positive free cash flow of $107,000,000 during the quarter, driven by a strong EBITDA generation and normalization of working capital compared with the previous quarter. Net leverage ratio at the quarter end was a solid 0.46x adjusted EBITDA. I will now deep dive into our main operational and financial metrics of the quarter.

Speaker 1

Total production during Q4 2023 was 56,400 BOE per day, driven by the timing of 11 wells in Majada del Palo Este during the quarter. This led to a sequential increase of 14%. On an inter annual basis, production increased 3%, reflecting that we have now surpassed the production levels prior to the transfer of the conventional asset back in March 2023. On a pro form a basis, adjusted by the production of such asset, our total production growth was 16% year over year. During the quarter, we recorded an outstanding performance in oil production, which increased by 70% on a sequential basis and 80% on annual pro form a basis.

Speaker 1

On other hand, gas production decreased 2% quarter over quarter, impacting our Q4 total production target and the exit rate. This was mainly due to the fact that during the quarter, we tie in 2 parts in the Northeast of Bajada del Palo Oeste, which has a lower gas to oil ratio than other parts of our acreage. During the Q4 of 2023, we continue in full development mode with 100% of the drilling and completion activity in Baja del Palo Este. We tie in 11 wells during the quarter in Parque Baja del Palo East 2019, 2020 2021. The tie ins boosted production in Q4 and led to an exceed rate close to 60,000 BOEs per day.

Speaker 1

The tie in of 23 new wells during the 2nd semester of 2023 reflects full utilization of 2 drilling rigs and 1 spudder rig with a run rate of 46 new wells per year in line with our 2024 plan, which we will discuss later on. During Q4 2023, our revenues were stable year over year as oil production grow of set lower real life prices. Total revenues were $309,000,000 2% increase compared to Q3 and 3% decline compared to Q4 2022. This was mainly driven by lower gas production as discussed previously and 50% decline in gas prices. Sales to export market accounted for 49% of the oil volume and 53% of net oil revenues.

Speaker 1

We have ported 2,000,000 barrels of oil composed by 1.6 barrel through the Atlantic and 400,000 barrels by pipeline to Chile. Prelight oil price for the quarter averaged $67.8 per barrel, down 2% year over year and flat compared to the previous quarter. The average realized domestic price was 60 $3.7 per barrel, while the realized export price was $74.2 per barrel. We are seeing good recovery in the domestic prices with crude in line with the $65 to $66 range for January February, which is key to found our growth plan. Lifting cost was $22,300,000 for the quarter, a 38% decrease compared to the same quarter of last year.

Speaker 1

Lifting cost per BOE was $4.3 a decrease of 40% compared to Q4 2022. These results continue to reflect the positive impact of our new operating model, fully focused on our shale oil asset, following the transfer of the conventional asset in the Q1 of the year. On a sequential basis, lifting cost per BOE was down 11 percent as the ramp up of production volumes continued to dilute fixed cost. We expect this trend to continue during 2024. The devaluation of the peso of approximately 130% led to cost savings in the second half of December.

Speaker 1

We are still closely monitoring the full impact of this event on our lifting costs of Q1 2024. Adjusted EBITDA during Q4 2023 was $288,000,000 an increase of 43% year over year. Adjusted EBITDA performance was supported by production growth and lower lifting costs. It also includes $81,000,000 in gains from repatriation of 27 percent of energy export proceeds at the blue chip swap exchange rate. This gain has been accounted for other income.

Speaker 1

This benefit has been extended and currently allow us to repatriate 20% of our exports at blue chip swap rate. We continue to see an expansion of margins. Adjusted EBITDA margin was 73% during the quarter, an inter annual increase of 7% points. Note that we have added the other income from the repatriation of effort proceed at the blue chip to our revenues to calculate our adjusted EBITDA margin. This provides a more accurate representation of our margins.

Speaker 1

For more detail, please see the earning note released yesterday afternoon. Net back during the quarter was $55.6 per BOE, a 39% increase year over year. During Q4 2023, we have another positive free cash flow quarter. Cash from operating activities was $347,000,000 reflecting higher adjusted EBITDA generation and normalization of working capital related to sale collections. Cash flow used in investing activities was $240,000,000 in line with the capital expenditures of $212,000,000 and a $70,000,000 increase in working capital related to CapEx.

Speaker 1

Free cash flow during Q4 2023 was therefore $107,000,000 Cash used in financing activities was $67,000,000 driven by the prepayment of local bonds, adjusted by peso inflation, as well as bond Series 3 in hard currency. Net levered ratio stood at 0.46x adjusted EBITDA at quarter end. Cash at the end of the period was $213,000,000 We now move on to the full year results. During 2023, we made solid progress across our 4 strategic levers. We increased P1 reserves and well inventory, reflecting the growth potential and the quality of our asset base.

Speaker 1

P1 reserves increased 27% year over year to 319,000,000 BOEs. Well inventory increased 28 percent year over year to 11 50 wells, of which only 99 were on production at the end of 2023. We also delivered solid operational performance, maintaining our status as a leading operator in Vaca Muerta. Total production was 51,100 BOEs per day, a 5% inter annual increase or 80% on a pro form a basis, adjusted by the transfer of the conventional assets in March 2023. Lifting cost was reduced 33% year over year to $5.1 per BOE.

Speaker 1

Our cost saving delivery was better than planned, reflecting a 7% improvement vis a vis our $5.5 per BOE guidance. Additionally, we made a strong progress in sustainability. We reduced emission intensity by 13% to 15.6 kilograms of CO2 equivalent, which place our company in the best quartile compared to the comparable Aptime player worldwide. I am also very proud of our safety track record. Total recordable incident rate, including employee and contractors, was below 1 every year for the last 4 years, with a 0.2 for 2023.

Speaker 1

Finally, during 2023, we continue to deliver robust total shareholder returns. Adjusted EBITDA was $871,000,000 up 14% compared to 2022. Our stock price increased 115% from December 31, 2022 up to date. As I mentioned previously, P1 reserves increased 27% compared to 2022 for a total of 318,500,000 BOEs estimated at year end 2023. This implies a total reserves replacement ratio of 4 58% and 4 85 percent for oil.

Speaker 1

Proof reserve life increased by 20% to 17 years. Net additions were 85,500,000 BOEs, driven by the activity in Bajada del Palo Oeste, where we added 40 new well locations and Bajada del Palo Oeste, where we added 26 locations. This resulted in a total of 297 book well locations in our P1 reserves. Certified present value at 10% discount rate attributable to the company interest in P1 reserve is $3,300,000,000 using a price assumption of $66.5 per barrel for oil according to the SEC guidelines. During 2023, we also achieved significant operating milestones.

Speaker 1

We tie in 31 new wells, 2 above our original guidance. This drilling and completion activity boosted our total production, leading to a 18% increase year over year on a pro form a basis. Most of our drilling and completion activity in the 1st semester targeted the de risking of our blocks. Solid productivity result in Aguila Mora and Bajardo del Palo Este allowed us to expand our inventory by 2 50 wells. During the year, we successfully secured the takeaway capacity to deliver on our 2026 plan.

Speaker 1

We obtained capacity in 2 key projects, 12,500 barrels of oil per day in the Vaca Muerta Norte pipeline and 31,500 barrels of oil per day in the Old El Val expansion. The treatment plan in our development hub was expanded to 70,000 barrels of oil per day. We are currently working on another project to increase total treatment capacity to 85,000 barrels of oil per day before year end. In terms of export volumes, in 2023, we increased oil exports to 52% of total oil sales, up from 44% in 2022. This was boosted by higher production and the start up of exports to Chile, which reached 4,700 barrels of oil per day in Q4 2023.

Speaker 1

During 2023, we also made solid progress in our emissions reduction and nature based solution projects. Our decarbonization projects included installation of a new vapor recovery unit, optimization of glycol dehydration process and the addition of renewable to our energy monolithic among other projects. Implementation of such projects led to the reduction of COP1 and COP2 in Greece greenhouse gas emissions by 30% year over year. As previously discussed, emission intensity was also reduced by 30% over the same period to 15.6 kilos of CO2 equivalent per BOE. Regarding nature based solutions, our subsidiary, IKEA, achieved significant milestone during the year.

Speaker 1

We finalized planting our flagship project in Roland Cui with 2,500,000 trees and initiated soil preparation activities in a neighboring plot of land in Vila Senayda. We have initiated work in our forest conservation project in Chagorale and also made good progress in regenerative agriculture and livestock projects. In parallel, we started the process to certify the carbon credit of our projects with Barra. We have consistently delivered strong financial metrics over the last 3 years, resulting in superior total shareholder returns. Adjusted EBITDA increased by 14% year over year to $871,000,000 in line with the midpoint of our original guidance.

Speaker 1

ROACE was 39%, consistently delivering top tier return on capital in the energy sector. Adjusted EPS per share was $5.2 an increase of 24% compared to 2022, driven by unadjusted net income of $191,000,000 We maintained healthy financial ratios with gross leverage at 0.71x adjusted EBITDA and net leverage at 0.46x. This outstanding performance across all financial metrics is reflected in the evolution of our share price, which more than doubled since year end 2022 to this date, outperforming our peers in LatAm upstream space. I will now share our 2024 guidance. As discussed during our Investor Day last September, we plan to increase the number of tie ins to 46 by utilizing our existing drilling and completion capacity in full.

Speaker 1

The entire drilling campaign will be focused on our development hub, with most wells in our flagship development in Baja del Palo Oeste. Based on this activity, CapEx is forecast to increase to $900,000,000 in 2024. According to our model, this activity will boost our production to between 68,000,000 and 70,000 BOEs per day during 2024. We expect lifting costs to continue to decrease on the back end focus on efficiency and the dilution of fixed costs by additional production volumes. We are forecasting $4.5 per BOE in 2024.

Speaker 1

Adjusted EBITDA is forecast to increase to between $1,000,000,000 and 1,150,000,000 using a realized oil price of $65 to $70 per barrel. Finally, we expect to continue reducing our greenhouse gas emissions intensity during 2024, in line with our 2026 reduction targets. I will now summarize the key takeaways of today's presentation. During 2023, we delivered robust operational and financial performance with double digit growth, improved reserve, total production and adjusted EBITDA. The transfer of our conventional asset has converted Vista into a fully focused Vaca Muerta company with lower cost and higher margins.

Speaker 1

Our robust performance during the year continues to prove our ability to deliver on our superior total shareholder return proposition, reflected by our peer leading share price performance. We issue an updated strategic plan, supported by our large high quality inventory, our operating credentials, our existing drilling and completion capacity and having secured midstream capacity to deliver on our production targets. In this respect, we are well on track to double our production to 100,000 BOEs per day by 2026. Our 2024 guidance is the first step in this direction with production grow of 35% and adjusted EBITDA growth of 23%. We plan to deliver on our 2024 and 2026 targets using our own cash generation.

Speaker 1

Before we move to Q and A, I would like to thank our investors for their continued support and the entire team at Vista for their commitment and hard work during 2020 3. I look forward to an equally successful 2024 and seeing you in our next earnings call. Operator, please open the line for Q and A.

Operator

Thank you.

Speaker 2

Miguel, many great achievements in the year with the reserves, the cost evolution and the financial results, which speaks for themselves.

Speaker 3

So I have 2 questions. 1 about actually both about production. But the first question, there was a bit of

Speaker 2

a shortfall in production versus the original targets you had. I understand the gas issue you mentioned, but it seemed that for oil, there was also a little bit less production. So if you could add a little bit more color on why that happened and then what the company is doing to overcome that, that would be great. And then if you could discuss what more can you do in 2024? You mentioned that you're fully utilizing the existing equipment.

Speaker 2

So is there any optionality to bring more equipment to Argentina? What is the likelihood of that happening?

Speaker 3

So how should

Speaker 2

we think about this 68,000 to 70,000 barrels per day, if you're more confident on the on reaching 70,000, if there is upside to that number? So any color there would also be super helpful. Thank you very much.

Speaker 1

Hi, Bruno. Thank you very much for your comment. And regards to real production, yes, first of all, I would say, I mean, we closed let me give you a bit of explanation. We closed Q3 2023 at almost 50,000 barrels per day. At that time, we guide on a sequential growth of 20% for Q4.

Speaker 1

We achieved really not a 20%, we achieved an oil production increase of 70% quarter on quarter, but natural gas production decreased 2%. In oil, we made very good effort to offset the lower production of the Q pilot that we mentioned before. The Q was a pilot and we were testing to frac 1 zone 8 wells at the same time. And clearly, the intensity of the fracture, even though we are evaluating, it didn't give the result that we were expecting for. At the BOE level, the impact of 2% quarter on quarter decrease in gas production explained half of the quarter miss.

Speaker 1

Gas production decreased by 2 factor. 1, basically the wells that we connected have lower gas oil ratio in the northeast of Baja del Paloeste. And also we have higher downtime of the legacy wells or the legacy conventional wells that we have in production. Regarding our 2024 guidance, we rated a target of 20,000 barrels per day. You should expect that Q1 2024 is at similar levels compared with Q4 2023.

Speaker 1

We plan to tie in this quarter 11 wells. We have 3 of them already tied in. And as we tie in the rest toward the end of Q1, you should see the second half of the first half of Q2 with a robust production growth for Q2. Then from Q2 onwards, I think you should expect between 10% 50% growth quarter on quarter, arriving around in Q4 to an average of 80,000 barrels per day. Regarding the activity, our current plan is to fully utilize all our contracted rig.

Speaker 1

We have 2 working rigs and 1 spudder. We are working on potentially speeding up the tie in of 1 or 2 pad that are included in 2024 plan, hiring and spot drilling and completion rig and completion capacity. So I think this one is pretty much is going to happen. In parallel, we are looking and we are having discussions with several oil service company provider to see if we can bring more equipment in terms of drilling and completion capacity to the country. So that discussion is ongoing.

Speaker 1

So you can factor in the fact that we are going to have a contract in a spot drilling rig and some completion capacity for 1 or 2 pad. The other thing is, I will say, is under negotiation. We will see if we will get the right conditions to really bring more equipment to the country.

Speaker 2

Great. Super clear. And just to confirm, this potential addition of new equipment would be upside to the existing drilling plan, right?

Speaker 1

That's correct, Bruno.

Speaker 2

Okay, super. Thanks again.

Operator

Thank you. One moment for our next question please. From the line of Tassos Vasconcellos with UBS. Please proceed.

Speaker 4

Hi, Miguel. Hi, Ali. All the team present. Thanks for taking my questions here. I have two questions on my side.

Speaker 4

The first one, it would be great to hear your thoughts on Middle East government so far. What is going on better or worse than initially expected? And if it changes your company's expectations for the next 1, 2, 3, 4 years at an extent? My second question, looking forward, of course, one of the main drivers for the case is production growth, right? We already discussed it a bit on what's dependent on the company, the drilling campaign and so on.

Speaker 4

But of course, part of this increased production is dependent on investment in infrastructure. So it would also be great to hear your thoughts on how investments in increasing these outflow capacity throughout Argentina is going on, if they are all on track and if you see any risks, potential delays on these investments? Those are my questions. Thank you.

Speaker 1

Hi, Tassos. Thank you very much for your question and welcome to this call. I guess it's your first time. So good to have you here. Regarding the first part of your question on how we see the government, so we have a very positive view on some of the proposed changes that the government is making, such as no price intervention by the government and freedom of export.

Speaker 1

I believe both things are very good to attract investment to Argentina. Argentina have a very unique opportunity in terms of bringing more proceeds to Argentina through export. And clearly, these two initiatives will help a lot the country in terms of bringing more investment and of course, exporting more. And Vista is an example of that. So we welcome this initiative, we support this initiative.

Speaker 1

I think the industry also was present at the Congress discussion through the President of a chamber that we have the African companies, the CEPH and basically he verbalized that support with his President and the Congress. So that is pretty good. With regard infrastructure and the progress that we have on that, I think we are basically pretty much on track with the Chile connection and what we call Vaca Muerta Norte that is in place and we are supporting the volumes that we saw we will be supporting at the time that we thought we will be supporting. The one that is delayed is the project of Old El Val. So we are experiencing delayed on the Phase 1 that should be finished is supposed to finish the Q1 of 2024 and now delayed to October.

Speaker 1

In Q1 2024, the full project supposed to deliver 120,000 barrel of oil per day. Now we believe it's going to be we will get in table 120,000, 150,000 in October. The pipeline was not an issue. We have an issue or they have an issue or speeding delay with the provision of pump. But this issue is resolved.

Speaker 1

So all equipment is in hand. So in October, we're supposed to have this 150,000 coming in line. The delay does not impact our plan. We have enough capacity in all the open access today. We are actually using 44,000 barrels per day, we speak.

Speaker 1

And also we have Vaca Muerta Norte and we have the tracking that give us flexibility. So we don't see any issues in infrastructure for 2024.

Speaker 4

Great. All clear. Thank you.

Operator

Thank you. One moment for our next question please. Comes from the line of Marina Mertens with Latin Securities. Please proceed.

Speaker 5

Hi, good morning and thank you for the update. I have two questions. First, considering all the changes going on in Argentina's politics and economy, the favorable outcomes at the Ojeda del Palo hub and the recent announcement of increased food reserves. What would Vista need to accelerate the already ambitious CapEx plan? And does the omnibus bill play any role in this decision.

Speaker 5

And the other one on domestic prices. We observed a rebound in the price of the local barrel in December, which continued into January. What are you anticipating for the remainder of the year?

Speaker 1

Hi, Marina. Thank you very much for your question. I will start with the second part. During basically the quarter, we were requested additional volume by local refineries. The price that we reflect by the earning reflect basically a mix between domestic sales, part of which we've been providing, as you said, the local price and the additional volumes that were paid at export parity.

Speaker 1

Of course, we see as a positive trend that domestic market is willing to validate export parity and we work on everything that is moving in that direction. Regarding to additional CapEx, I mean, our plan for 2024, I would say, is ambitious enough. The growth that we are aiming for is probably one of the highest in the last year is 35%. So therefore, I would say there's probably little room to aim a bit higher. Now if you ask me one thing that going forward, we help to continue those level of growth even to aim higher will be free access to be able to repatriate dividends or proceeds.

Speaker 1

Anything in terms of freeing the controls that we have today in Argentina, Clearly, we resonate with investor, with us and we create additional growth.

Speaker 5

Great. Thank you.

Speaker 1

You're welcome.

Operator

Thank you. One moment for our next question, please. And it comes from the line of Daniel Guardiola with BTG Pactual. Please proceed.

Speaker 6

Thank you and good morning guys and congrats for the results. I have a couple of questions from my end. The first one is on the capital structure of the company. I mean, clearly, right now, you're running a very underlevered balance sheet, which makes sense considering that most of your operations are in Argentina. But bear in mind that the macroeconomic environment may improve towards second half of the year.

Speaker 6

You're having a better visibility in terms of pricing dynamics. Will you consider this structure or this low leverage to be suboptimal? And can you share with us what will be for you guys an optimal capital structure? So that will be my first question. And my second question is regarding growth.

Speaker 6

I mean, I understand your 2024 plan is already a very ambitious one. But looking beyond 2024, what I'm seeing is that ifaca Muerta is a very concentrated basin with a few players with not a lot of opportunities, especially inorganic opportunities. And I wanted to know if you're taking a look at the current process that Exxon is running to basically sell their Vaca Muerta assets? That will be my two questions.

Speaker 1

Hi, Daniel. Sorry, I was in mute. First of all, also welcome you to this call and thank you very much for your question. As you mentioned, I mean, we feel very comfortable at the current stage with the way that we run the company leverage wise. And as also you correctly mentioned, there's room for us to have a bit more leverage.

Speaker 1

But for that, we have to have a reason. As you also mentioned, I mean, our growth program is super ambition and we have the luxury to grow using our own cash flow generation. And I think that has been somehow recognized by the market and is part of the part of what you see on the evolution of the stock price of Vista, I believe is related to the way that we run the company. That doesn't mean, as you said, if it's a change, there's an important change in context that we can basically aim for further growth and have a different leverage ratio going forward. One of the things that could, for example, change the dynamics is that we have an acquisition.

Speaker 1

And of course, we are always active on that front. We are very active in terms of looking for new opportunities. In the particular case that you mentioned, yes, I mean, the half interest asset and yes, we are looking into that. Probably nothing more that I can comment at this stage, just the fact that yes, we look every single opportunity that arose in Vaca Muerta that is our turf.

Speaker 6

Thank you. Can I squeeze in an additional question?

Speaker 1

Yes, Daniel,

Speaker 6

go ahead. Regarding your cost structure, I mean, you have done a terrific job streamlining your cost structure, bringing down your lifting cost from 13% or 12.5%, 5 years ago to very low levels right now, close to 4.3%, 4.4%. Do you foresee additional room to streamline your overall cost structure, not only lifting but maybe also SG and A?

Speaker 1

Yes. Look, we come from a long way of reducing particularly the lifting costs. And I believe we have little room left as the result of the growing production. Most of the lifting costs, probably 70% of the lifting costs is structured, is fixed costs. So as we grow production, we will be diluting part of that cost, 70% of those.

Speaker 1

So I think we have a little room going forward. But I will say also that we are achieving the technical limit on things that we can do. So the reduction that you will see in lifting costs is going to be more asymptotic to a number and no big reduction as we experienced at the beginning.

Speaker 6

Understood. Thank you very much. You're very welcome.

Operator

Thank you. One moment for our next question. Our next question is from Paula LaGreca with TPCG. Please proceed.

Speaker 3

Hi. Thank you for taking my question. I would like to know what's the reason why crude oil exports

Speaker 2

declining in 4Q 'twenty three in terms

Speaker 3

of volume fall? Exports declining for Q23 in terms of volume salt? Was it because of an increasing crude oil demand from local refineries? So you are limited to

Speaker 1

Hi, Paula. Look, I think there was two reasons why that happened. 1 is a matter of stock at the end of the year in the terminal that basically we experience almost every year. And the second part is related to the fact that yes, we have more demand on the local market, a bit of more demand in the local market that as explained before, we sold our export parity. So this is pretty much the reason.

Operator

Thank you. One moment for our next question. And it comes from the line of Andres Felipe Cardona with Citi. Please proceed.

Speaker 7

Hi, good morning, everyone. Miguel, Pablo, Ali, congratulations on the solid results. And I have 2 very quick questions and perhaps one more detail. So the first is, what is the implied realization price for the local sales or the domestic sales? The second one is what is the assumption in terms of export taxes?

Speaker 7

And if the export tax remain sorry, what is the assumption of volumes exported and if the export tax remain at 8% at the end? And the more detailed question is why to consider M and A and not accelerate on the existing portfolio? I mean, you have close to 11.50 drill locations. Why to pursue M and A at this stage? Thank you.

Speaker 1

Andres? Hi, Andres. This is Miguel. So the line was not so good, but I think I managed to listen. So the Q1 local prices that we are seeing so far is 66.

Speaker 1

So it's quite good. Export tax today is 8%. And I think there was a third question related to

Speaker 7

Miguel, the question on the local crude sale prices, what is incorporated in the guidance? And the last question was why to consider M and A at this point and not accelerate on the existing portfolio, you have over 1100 drilling locations, right?

Speaker 1

Okay. Yes. Sorry, Andreas, the line is not so good. But again, I mean, in terms of pricing, what we run-in our plan was between 65 70 total, this is real high price. Today, we are looking at a local price, what the refinery is paying for us, $66,000,000 This is Q1, okay?

Speaker 1

Now our guidance was a plan between $1,000,000,000 EBITDA and $11.50 EBITDA. Looking at the range price range of real life pricing, dollars 65 to $70 real life pricing. Local price Q1, dollars 66 today. In terms of M and A, I don't think you will see anything that will impact our planning during 2024, okay? And as I mentioned before, we are basically active M and A wise as have we been in the past, evaluating opportunities that are today in place that mainly is one that was the question I don't remember from who before.

Speaker 1

Thank you, Miguel. You're welcome.

Operator

Thank you. One moment for our last question, please. It comes from the line of Alejandro De Michelis with Jefferies. Please proceed.

Speaker 1

Good morning, guys. Thank you for taking my call and congratulations on the call. Just one quick question, Miguel. You're talking about accelerating production, if you can, or M and A and so on. Can you talk about how you see potentially to bring in partners into your acreage?

Speaker 1

Is that something that in the current situation of Argentina, improving conditions in Argentina that you could see

Speaker 2

feasible?

Speaker 1

Hi, Alejandro. Yes, thank you for your question. I mean, yes, it's I mean, when we talk about M and A, we consider everything. As you know, I mean, we have today our activity is concentrating in what we call the development hub and the development cap is our Federal, Bajal Paloeste. Bajal Paloeste now became part of the development cap.

Speaker 1

So everything that we have in the north, particularly Aguila Mora is a place that in the future, yes, we could consider to bring a partner to add capital. We are very well I mean, we are recognized and we are very well positioned as a low cost, low carbon and reputable operator. So yes, when we look at M and A, this is something that we could consider in the future. That's great. Thank you.

Speaker 1

You're welcome.

Operator

Thank you. And with that, we conclude the Q and A session. I will turn the call back to Miguel Galucio for final comments.

Speaker 1

Well, guys, thank you very much for participating, for your question, for the support and looking forward to see you next quarter.

Operator

Thank you, ladies and gentlemen. You may now disconnect.

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