Alejandro Anibal Demichelis

Alejandro Demichelis asked about GeoPark's expected cost development for the year, particularly in light of Q4 one-offs, and the company's stance on the competing offer for Frontera Energy's assets.

Answer

CEO Felipe Bayón highlighted that GeoPark met or exceeded all cost guidance for 2025. CFO Jaime Caballero detailed Q4 one-off costs from Platanillo and Vaca Muerta startups, and seasonal effects, confirming 2026 lifting cost guidance of $13-$15/bbl and G&A at $4/bbl. COO Martín Terrado provided specifics on cost reductions in Argentina and Llanos 34. Bayón then addressed the Frontera situation, emphasizing the deal's transformational nature, recent antitrust approval, and the board's commitment to shareholder value while assessing all options.

Alejandro Demichelis with Jefferies inquired about GeoPark's expected cost base for the full year, particularly addressing the one-off impacts observed in the fourth quarter, and sought comments on the evolving situation with the competing offer for Frontera's assets.

Answer

CEO Felipe Bayón provided context on meeting guidance and the operational stabilization, noting that most Q4 one-offs were non-recurrent. CFO Jaime Caballero detailed the one-offs, including startup costs for Platanillo and Vaca Muerta ($7 million) and seasonal labor/year-end project costs ($2-$3 million), confirming 2026 guidance of $13-$15/barrel lifting costs and $4/barrel G&A. COO Martín Terrado added specifics on cost reductions in Argentina (from $32/barrel to $22-$27/barrel, targeting $10-$12/barrel by year-end) and Putumayo, and confirmed Llanos 34 costs were back to Q3 levels. Bayón also reiterated commitment to the Frontera deal, highlighting the recent SIC approval and the board's focus on shareholder value amidst the new offer.

Alejandro Demichelis asked for specific examples of improvements from the new CEO's strategic review and for an update on inorganic growth opportunities, particularly in Argentina's Vaca Muerta.

Answer

CEO Felipe Bayon explained that the company is focused on extracting more value from existing assets through operational efficiencies and is actively pursuing inorganic growth. He confirmed a strong strategic interest in Argentina's Vaca Muerta, noting his recent visit to the Neuquen province and a solid pipeline of potential deals and partnerships.

Alejandro Anibal Demichelis of Jefferies inquired about GeoPark's outlook on CapEx and production growth amid current oil prices and asked for more details on the closing process for the Vaca Muerta assets in Argentina.

Answer

Outgoing CEO Andrés Ocampo addressed the Argentina transaction, confirming the May 13, 2025, outside date allows either party to withdraw. He reiterated GeoPark's commitment to closing the deal and distanced the company from certain social media commentary. CFO Jaime Caballero Uribe stated that the 2025 capital plan is robust, designed to be economic at $60/barrel, and is supported by a strong hedging program and cash position, seeing no reason to alter the current capital allocation.

Alejandro Anibal Demichelis asked for expectations on flow rates and gas levels for the Confluencia wells. He also inquired about the 2025 production and CapEx outlook for Llanos 34, and whether a polymer injection pilot would begin in 2025.

Answer

Executive Rodolfo Terrado projected initial production for Confluencia wells to be in the 750 to 1,500 bopd range, with a gas component of around 5%. For Llanos 34, he guided for a single rig to continue drilling, resulting in an approximate 15% production decline in 2025. He also confirmed a polymer pilot is planned for H2 2025.

Alejandro Demichelis asked for more details on the significant decrease in drilling and completion (DNC) costs, current cost levels, future expectations for DNC costs, and whether similar reductions are observed in non-operated acreage.

Answer

Miguel Galuccio, Founder, Chairman, and CEO of Vista Energy, highlighted progress in DNC cost reduction through bulk frac sand, the Xtrema Completion Shop, renegotiated contracts, and bundled drilling services, resulting in a DNC cost of $12.1 million per well in H2 2025 for Bajada del Palo Este. He mentioned ongoing projects like a new sand washing plant, bundling completion services, new pump technology, and casing design, targeting $11.7 million per well in 2026 and $11.3 million in 2027, with potential for further reduction. He did not explicitly address non-operated acreage.

Alejandro Demichelis inquired about the current state and future outlook for drilling and completion (DNC) costs, particularly after the significant decreases achieved, and whether similar reductions are observed in non-operated acreage.

Answer

Miguel Galuccio, Founder, Chairman, and CEO of Vista Energy, highlighted the successful implementation of bulk frac sand and the Xtrema Completion Shop tool, along with contract renegotiations, which led to a DNC cost of $12.1 million per well in H2 2025 for Bajada del Palo Este. He outlined ongoing projects like a new sand washing plant and pump technology, targeting $11.7 million per well in 2026 and $11.3 million in 2027, with potential for further reductions.

Alejandro Demichelis of Jefferies Financial Group asked for a detailed breakdown of well cost developments, potential future reductions, and a cost comparison between La Amarga Chica and Vista's operated blocks.

Answer

CEO Miguel Galuccio detailed three primary drivers of cost reduction: 1) Technology and innovation, such as using wet sand and smart drilling tools; 2) Renegotiating prices for specific consumables and services; and 3) Unbundling services in their contracting strategy. He announced these initiatives have already reduced drilling and completion costs by 10%, from $14.2 million to $12.8 million per well, and noted that historical costs at La Amarga Chica were similar to Vista's before these new savings were captured.

Alejandro Anibal Demichelis inquired about the specific synergies from the Petronas acquisition, the timeline for their realization, and the nature of discussions with the operator, YPF, regarding shared capacity and services.

Answer

Miguel Galuccio, Chairman and CEO, detailed four key synergies: enhanced transportation flexibility with 57,000 bopd of spare capacity, potential to share oil treatment facilities, optimized drilling of longer laterals near block borders, and collaboration with YPF to reduce well construction costs. He emphasized a strong and exciting working relationship between the two teams.

Alejandro Demichelis sought confirmation that the Oldelval pipeline expansion is complete and will ramp up by the end of Q1, and asked how costs are expected to evolve for the rest of the year.

Answer

CEO Miguel Galuccio confirmed the Oldelval pipeline construction is finalized and is expected to reach full capacity by the end of Q1 or early Q2 2025. He stated this will have a major positive impact by eliminating significant trucking costs, which had peaked above $20 per barrel. He also noted that drilling costs are expected to remain stable, while lifting costs are guided to be slightly lower than in 2024.

Alejandro Demichelis asked about the flexibility within the 2025 guidance, specifically how quickly Vista could ramp up production if spare pipeline capacity becomes available.

Answer

Chairman and CEO Miguel Galuccio explained that Vista will have significant flexibility in 2025 due to having spare evacuation capacity and a second frac set. To accelerate beyond the current guidance would require a fourth drilling rig, a decision that would depend on the market context, particularly international oil prices.

Alejandro Demichelis asked about YPF's projected production growth for 2026 and 2027, specifically for shale oil, and sought an update on the development strategy for the recently acquired Refinor asset and the broader refining portfolio.

Answer

Chairman and CEO Horacio Marín indicated expected average production of around 215 for 2026 and 290 for 2027, with more precise figures to follow. He explained that Refinor provides a significant logistical advantage for the E-grade, with plans to rebrand select gas stations as YPF and explore value creation from the closed Campo Durán refinery through SOR initiatives.

Alejandro Demichelis asked about YPF's expected production growth for 2026 and 2027, and the development strategy for the recently acquired Refinor asset and the broader refining portfolio.

Answer

Chairman and CEO Horacio Marín indicated expected production growth to around 215 (2026) and 290 (2027) barrels per day, with more precise figures to follow. Regarding Refinor, Mr. Marín explained its importance for logistical advantages and the E-grade, noting the company's decision to take full control. He added that the best gas stations would be rebranded YPF, others would remain Refinor, and the Campo Durán refinery is closed with plans to create value.

Alejandro Demichelis from Jefferies Financial Group sought confirmation on SQM's CapEx requirements for the current and next year and asked how the company's realized lithium prices would behave if spot prices continue to decline.

Answer

Gerardo Illanes, VP of Services & Finance, explained that the CapEx plan is reviewed annually and will be updated in the coming months, with no changes to the previously shared guidance at this time. Felipe Smith, Senior Commercial VP of Lithium, confirmed that SQM's realized prices are largely linked to price indices, particularly in China, and therefore, the company expects its average sales price in Q2 to be lower than Q1, following the market trend.

Alejandro Demichelis from Jefferies asked for an update on CapEx requirements for the current and next year, and inquired how SQM's realized lithium prices would behave if spot prices continue to decline.

Answer

Gerardo Illanes, VP of Services & Finance, stated there were no updates to the CapEx plan, which will be formally reviewed and shared in the coming months. Felipe Smith, Senior Commercial VP of Lithium, confirmed that SQM's realized prices are largely linked to price indices, particularly in China, and therefore are expected to follow the market trend, resulting in a lower average price in Q2 versus Q1.

Alejandro Demichelis from Jefferies asked for more details on cost control initiatives in Argentina and whether costs are expected to track inflation. He also questioned how potential administrative changes in Argentina, such as the merger of ORSNA and ANAC and a new Secretary of Transport, might impact the ongoing discussions for the rebalancing of the AA2000 concession.

Answer

CFO Jorge Arruda addressed costs, explaining that the Q1 increase was driven by a significant gap between inflation and currency devaluation in Argentina. He expects more normalized cost levels going forward with no material quarter-over-quarter increases. CEO Martin Francisco Eurnekian commented on the concession rebalancing, stating that while government bureaucracy can be slow and the new secretary might slightly impact the timeline, he does not expect a material change to the final outcome. He declined to comment on specific rebalancing figures, citing the confidential nature of the ongoing regulatory process.

Alejandro Anibal Demichelis inquired about the progress of the concession review process in Argentina and the company's strategy for inorganic growth opportunities, both within Latin America and in other global regions.

Answer

Martin Francisco Eurnekian, an executive, responded that while there is no exact date for the Argentine concession review, they expect positive news and a clear path forward within the year. Regarding inorganic growth, he confirmed the company is actively evaluating diverse opportunities in the Middle East, Africa, Latin America, and Europe, and has expanded its M&A team to pursue these possibilities.

Alejandro Demichelis of Jefferies inquired about the potential impact of a shutdown of Aerolíneas Argentinas, the expected CapEx and timeline for the Florence Airport expansion, and the current status of the concession contract review in Argentina.

Answer

CEO Martin Francisco Eurnekian addressed the questions. He stated that Aerolíneas Argentinas accounts for 6% of CAAP's revenue and highlighted the business's resilience by citing a past airline shutdown in Montevideo that did not stop EBITDA growth. For Florence, he expects final approvals by year-end for a 2-3 year construction project that will double the airport's capacity. Regarding the Argentine contract, he confirmed the re-equilibrium review is delayed but in progress, and he is awaiting official results from the regulator.

Alejandro Anibal Demichelis asked for the outlook on cash costs for the remainder of 2025 and the rationale behind the increased use of a share dividend.

Answer

Raul Jacob (executive) stated that Southern Copper expects the full-year 2025 cash cost to be in the $0.75 to $0.80 per pound range, assuming stable by-product prices. He explained that the share dividend was a prudent measure after a significant $711 million final tax payment for 2024 and other first-quarter dues reduced Q1 cash flow, a situation not expected to recur in subsequent quarters.

Alejandro Anibal Demichelis of Jefferies inquired about the outlook for cash costs for the remainder of 2025 and the rationale for increasing the share component of the dividend.

Answer

Executive Raul Jacob explained that the dividend structure was a prudent cash management decision due to significant Q1 tax and profit-sharing payments that impacted cash flow. He projected the full-year 2025 operating cash cost to be between $0.75 and $0.80 per pound, contingent on stable by-product prices.

Alejandro Anibal Demichelis asked for an indication of the CapEx budget for 2025. He also inquired about the current water situation in Mexico and the status of the Sonora River.

Answer

Executive Raul Jacob stated that while budgets are still under review, the company is considering a CapEx of about $920 million for 2025, though this is not yet final. Regarding water in Mexico, he assured that all operational needs for 2024 and 2025 are met, and the company is storing water as a precaution, but the situation is currently stable.

Alejandro Anibal Demichelis from Jefferies followed up on net cash costs, asking if they would remain below $1 per pound given stable by-product volumes. He also inquired about the dividend policy for the rest of the year, particularly the cash-to-stock ratio, and confirmed the 2025 CapEx outlook for Tia Maria.

Answer

Executive Raul Jacob responded that while by-product volumes are expected to be stable, keeping net cash cost below $1 per pound is dependent on metal prices. He explained the 50/50 cash-stock dividend was a Board decision to conserve cash for investments like Tia Maria and a $500 million debt repayment in 2025. He confirmed the current 2025 Tia Maria CapEx budget is $316 million but is under review.

Alejandro Anibal Demichelis from Jefferies followed up on the dividend, asking if stock dividends are limited to current treasury shares, and requested an update and potential timeline for the Tia Maria project.

Answer

Executive Raul Jacob confirmed the current stock dividend will use about 8 million of the 111 million shares held in treasury and that the company is not considering issuing new shares. On the Tia Maria project, he noted a very positive shift in the political environment and improved social sentiment due to years of community work, but declined to provide a specific timeline, committing only to quarterly updates.