Good morning, and welcome to the Vista Investor Day. Today's call is being recorded. All participants will be in a listen-only mode. After today's presentation, there will be an opportunity to ask questions. You may submit online questions at any time today using the window on the webcast, and they will be answered during the Q&A session. Dial-in participants may ask a question by pressing star then one on your telephone keypad. To withdraw your question, please press star then two. I would now like to turn the conference over to Vista Strategic Planning and Investor Relations Officer, Mr. Alejandro Cherñacov. Please go ahead.
Good morning, everyone. We are very excited you could join us today and extremely pleased to welcome you to Vista's first Investor Day. Before we go into the details of the day, let me very briefly show you our safe harbor statement and remind everyone 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. However, during this presentation, we may discuss certain non-IFRS financial measures, such as adjusted EBITDA. Reconciliations of historical measures to the closest IFRS measures can be found in our full year 2020 earnings release.
Today, our CEO and our management team members will present Vista's 2022/2026 strategic plan. We'll kick off with Miguel Galuccio, Chairman of the Board, CEO, and Founder, who will be discussing our strategy to deliver superior shareholder returns with a lower carbon footprint in the current energy context. Next, Gabriela Prete, our Sustainability and QHSE Manager, will dive deeper into our sustainability program and why we consider it a competitive advantage. Following Gabi, Juan Garoby, our Chief Operating Officer and Vista co-founder, will go through our assets in Vaca Muerta. Juan will also introduce some key members of our operations teams, who will describe past, present, and future actions to continue outperforming in operational efficiency and safety standards.
Last, Pablo Vera Pinto, Vista's Chief Financial Officer and Co-Founder, and myself will walk you through the details of our 2022 to 2026 growth plan and its expected impact on future cash flow and profitability. We will share our capital allocation priorities and explain why we consider them fundamental to maximize shareholder value. The day will close with a Q&A session. Before we get started, just a few housekeeping items. We expect the presentation to be 60 minutes long in total. After that, we will move to Q&A. Dial-in participants will have a chance to ask live questions during the Q&A session. You will also be able to submit your questions to me by typing them on the question box under the video screen. Third and last, you will find the slides of today's session and the video to replay on demand, both on our website, vistaenergy.com.
Energy is not lost, but transformed. It may come up as an idea, connecting a brain cell to another, kicking off. This energy spark is thus ignited and transformation starts in our company. In the search for this vital link, provide the world with the energy it needs today while looking after our future. This energy spark spreads and fuels other actions, which in turn become energy for further ideas. Ideas then become innovation and inspire people. These people then turn that inspirational energy into work, performance, and commitment. Commitment is then turned into trust, trust based on the energy contained in our expertise, professionalism, and leadership perception. Trust is soon seen in results, supported by our team's efficiency, work, and diligence. Results then become sustainable achievements. That energy transformation now starts changing our reality. It transforms our company and drives our evolution.
When you think it's all over, it transforms again into a new way of doing things. It's endless. We understand today's energy. The one that allowed us to build this company is driving our transformation into the future. Vista, e nergy for tomorrow.
Good morning, everyone. During our presentation today, we will be presenting how we propose to deliver superior total shareholder return driven by a strong net cash generation in a world that continue to demand more and more reliable, affordable, and low carbon energy.
We have built a company that is ready to thrive in the new context, and our achievement over the last four years give me confidence that we are fit for the future. As the world population continues to grow and the global economy expand, there is no question that energy demand will continue rising. For global growth to be sustainable, this energy demand need to be supplied with reliable, affordable, and low carbon energy. The energy transition has taken center stage of the global agenda, and I am convinced that a low cost and low carbon energy producer like Vista will play a key role over the next decade as this transition unfolds. We are seeing shareholders putting a strong focus on capital discipline and earning quality by demanding that companies strike the right balance between profitable growth and cash distribution to shareholders.
In particular, for oil and gas companies that are likely to face price volatility in the coming years, the key differentiating factor will be to show resilience to lower prices, while also being able to capture the upside of higher oil prices. Vista is well-positioned to excel throughout the cycle, given its top quality asset base and strong execution capabilities, which allow us to generate industry-leading return with flexible and short cycle investment plan that are aligned with the transition to a low carbon economy. Vaca Muerta is a world-class play that delivers low cost, low carbon resources with top productivity levels. Cumulative production over the first 180 days of an average oil well in Vaca Muerta have increased by more than 30% on normalized basis since 2017, about the average well in a Permian Basin.
The quality of the play also reflect the relatively low emission intensity of greenhouse gases that we are seeing in the new development of Vaca Muerta. The growth in oil and gas production from Vaca Muerta have already changed the paradigm in Argentina. With approximately $29 billion invested up to date, the play has already reached a total production of more than 500,000 BOE per day, showing a compound average growth rate of 56% since 2013. Vaca Muerta oil production reached approximately 190,000 barrels per day in October and currently represent 35% of Argentina's oil production. While gas production from Vaca Muerta reached 42 million cubic meters per day, representing 33% of Argentina's gas production.
This production growth has helped Argentina materially reduce gas imports, which coupled with growing volume of light crude oil export, is supporting the economy by improving the balance of payments. Medanito production has found its position in the international marketplace as a highly competitive, low-sulfur and light crude oil, helping to reduce discount to Brent. As Argentina's domestic refining market is largely mature and duly supplied, it is reasonable to expect that the forecast crude oil production growth should result in increase of export volumes. This is setting Vaca Muerta on the path to become a relevant crude oil export platform and becoming an important contributor of U.S. dollars to the economy. In this context, our superior total shareholder return value proposition is based on four strong foundations.
In first place, Vista holds a deep, ready-to-drill well inventory, which gives us runway to achieve our ambitious growth rate over the next five years, and then sustain or even continue growing into the next decade. Secondly, our highly competitive economics are the result of a low development cost and low lifting cost, which allows us to invest with a very short payback cycle and take investment decisions on a relatively small incremental dollar amount. This provides us with a high degree of flexibility. In third place, our strong focus on capital discipline and a sharp cost management have allowed us to navigate turbulent times, giving priority to our balance sheet, which is very robust at the current point, 0.9x net debt to EBITDA. Last but not least, we truly believe that our sustainability-focused culture will provide us with competitive advantage in the long term.
The progress we have made over the last 12 months is an evidence of the traction that our committed people generate. During the next five years, our priorities will be built upon these foundations. We foresee to progressively increase our drilling and completion activity at Bajada del Palo Este, which we expect will double from 20-40 wells per year by 2026. We expect most of our incremental oil production to be sold in the international market, with a target of 60% of the total oil production going to export market by 2026. This is up from the 30% in 2021. We also expect to continue reducing costs with a target of $6 per BOE for lifting cost by 2026, and a target of $6.5 per BOE for development costs by 2026.
As a key priority, we forecast to reduce greenhouse gas emission intensity by 75% compared to our 2020 levels by implementing a number of technological upgrades to our facilities and key processes. Excess funds created by this increase in production at lower costs are planned to be used, among other things, to reduce 1/3 of our gross debt to $400 million over the next five years with a stronger balance sheet providing us further flexibility. Executing on our priorities should allow us to generate cumulative net cash of $1 billion over the next five years. To achieve this, we plan to deliver on the following key metrics by 2026. First, we plan to double production to over 80,000 BOE per day, and assuming a conservative realized oil price of $60 per barrel in real terms.
We aim to generate over $1 billion in adjusted EBITDA by 2026. As a result of these cost efficiencies, which our COO, Juan Garoby, will describe in more detail shortly, we expect to generate industry-leading returns alongside this growth, taking our adjusted EBITDA margin to more than 65% and our return on average capital employed to over 45% by 2026. We plan to direct part of our net cash generation to increase our financial flexibility through debt reduction, targeting a net and gross leverage ratio of 0.3x and 0.4x, respectively. Finally, by implementing already identified operational projects, we plan to significantly reduce our greenhouse gas emission intensity down to 9 kg of CO2 per BOE by 2026. As I have been stressing through my presentation, sustainability is a mandate, but also a sort of competitive advantage.
We have a clear and concrete ambition. We aspire to become net zero in Scope 1 and 2 by 2026, and we expect to do so by prioritizing reduction in emission of our operation. We will complement this effort by removing the carbon of our residual emissions and launching our own portfolio of nature-based solutions in 2022, comprised of a diversified set of forest and soil carbon sequestration project. There is an opportunity to effectively and cost efficiently generate our own carbon removers in Argentina, given the region's vast natural resources and ecosystem together with our top execution capabilities. The chance of providing carbon neutral oil to our customers could represent a considerable competitive advantage for Vista. I will now turn it over to our sustainability and QHSE manager, Gabriela Prete.
Good morning. First, let me deep dive into the initiatives that drive our aspiration to become net zero in 2026. The first part of this plan consists of reducing Scope 1 and 2 GHG emissions in our operations. To achieve this, we are already implementing selected projects prioritized based on our carbon abatement cost curve, including vapor recovery units, blanketing gas in our storage tanks, improving parameters in the glycol dehydration process, and the electrification of compression stations. As a result, we are targeting to reduce our Scope 1 and 2 GHG carbon emission intensity by 75% from 39 kg of CO2 equivalent per BOE in 2020 to a forecast of 9 kg of CO2 equivalent per BOE in 2026.
On an absolute basis, we expect to reduce our Scope 1 and 2 emissions from 417,000 tons of CO2 in 2020 to an estimate of 265,000 tons of CO2 equivalent in 2026. This implies a reduction of 35% in absolute levels while doubling our production in the next five years. When we run economics for these projects, giving our internal carbon price of $50 per ton, all projects have a positive rate of return. Forecasted total capital expenditures on these initiatives amount to $8 million per year on average between 2022 and 2026. In order to offset the residual emissions, we plan to launch our own portfolio of nature-based solutions developed by us locally and cost efficiently following stringent standards.
We are aiming for projects that are material, incremental, measurable, that promote biodiversity, and above all, are permanent. We are strongly focused on project quality to maximize environmental benefits and reliability. To reduce risk, we look for diversification across different geographical regions, project types, and operating models. Our emphasis is on triple environmental, social, and economic sustainability impact.
In compliance with our high governance standards. We are developing an internal CO2 accounting framework, aiming for higher standards than those of carbon verifying agencies. We believe NBS to be the most cost-efficient and impactful initiatives to complement our operations-driven carbon footprint reduction. This is why we plan to invest between $5-$10 million per year in value-generating NBSs over the next five years, starting in 2022. This is materially less costly than other CO2 abatement options, and are expected to cost less than the internal carbon pricing of $50 per ton we define, therefore allowing us to unlock value. Nature-based CO2 removals, together with our carbon reduction initiatives across operations, are the best alternative to achieve carbon neutrality while protecting and restoring nature.
Now, to best reflect the spirit of our social initiatives, let me show you a video that summarizes our commitment to our people and the communities in which we live and work. It also demonstrate how investing in our people is a cornerstone of Vista's ESG program.
At Vista, our main asset is our people, and we are strongly committed to developing an organizational culture that fosters diversity, equity, and inclusion. We have an amazing and inspiring female workforce with a growing share of talented women leading our efforts in the front line of our operation. We seek to continue expanding the role of women in our organization. Our gender action plan has several initiatives. We are working towards increasing the number of female employees in our company. In 2021, over 50% of new hires were women. We think development is equally important.
Our mentoring program, targeting top female talent, focuses on developing skills and capabilities that will ensure equal career opportunities at Vista. We are also working on other human resource policies, such as responsible parenting, and are providing company-wide training to increase awareness on diversity, equity, and inclusion-related issues across our workforce. We embrace the communities in which we operate. As part of our continuous commitment to sustainable development, we foster local economic development and seek to generate meaningful long-term benefits in the communities where we live and work. We are very active in Catriel in the Río Negro province, sponsoring sports, education, health, and infrastructure projects. We made significant equipment and infrastructure contributions in the provinces of Neuquén and Río Negro during the COVID-19 pandemic. We have also subscribed collaboration agreements with provincial trade promotion agencies for the development of local providers.
We place significant value in our people, represented by both employees and the communities in which we operate, and understand that the sustainability of our business depends on how well we relate to them. We continuously seek to engage in long-term relationship building with all our stakeholders.
Hello again. Our robust growth plan is supported by the values embedded in our Vista way and by our sound governance standards. Our board of directors, directly and through their audit, corporate practices and compensation committees, are responsible for supervising the company's strategic direction and overseeing our management. Vista's corporate practices committee specifically reviews the execution of our annual plan, its risks, as well as our ESG strategy on a quarterly basis. To oversee the achievement of our goals, we have a majority independent board.
Two-thirds of our board members are independent, and all board committee seats are occupied by independent board members only. We also seek to ensure everyone in the company is committed to our targets through accountability measures. Vista is a mostly horizontal and agile organization. As our company grows, we intend to remain agile and flexible, but also strongly committed. Several senior managers, as well as the executive team who co-founded Vista, are personally invested in the company. More than 20% of our employees are shareholders of Vista through our long-term incentive plan with full oversight of our compensation committee. Also, 100% of our employees' short-term compensation incentives include, but are not limited to, a relevant sustainability goal component. Individual and corporate targets are set raising the bar with respect to operational and financial KPIs, including ESG impact, to continue driving efficiency within the organization.
Good morning, everybody. We'll now deep dive into two key aspects of our operation. Our top quartile-quality assets comprised of a deep, ready-to-drill, short-cycle well inventory in Vaca Muerta and our peer-leading operating performance. At the end of this section, I will share how we plan to continue improving our operation and provide our production and cost targets for the next five years. To kick it off, I would like to use some footage which introduces our acreage in the core of Vaca Muerta, which is conveniently connected to infrastructure with spare capacity, linking our upstream operation to the local refining system and export facilities.
Vista is a pure Vaca Muerta play and has become the second shale oil producer in Argentina in less than four years. This leading position is underscored by our five concessions, three operated with 35-year terms covering more than 158,000 net acres, most of which are contiguous and clustered, maximizing development efficiency. In our flagship project, Bajada del Palo Oeste, we have successfully tied in 40 new shale oil wells from a total well inventory of 550 locations. We have also identified up to 150 net new well locations in our other concessions, adding upside value to our plan. Vista has existing facilities with capacity to process up to 55,000 barrels of oil per day, leading to a lower development cost.
We also have direct and close access to both the federal oil transportation network that cost-efficiently connects us to the domestic refining system and to export facilities. Over the past two years, our successful marketing effort led to the positioning of Medanito as a highly competitive, low-sulfur light oil in international markets.
I will now ask my colleague, [Germán Botezy], Vista's Exploration and Development Manager, to join us from our geosteering room in our offices in Neuquén. He will provide further details about the high-quality rock properties of Bajada del Palo Oeste.
Vaca Muerta has proven to be a world-class resource play. The productivity of its horizontal wells is extremely competitive when compared with the best shale plays in the United States. This is partially due to the great quality of the rock. In essence, Vaca Muerta combines the best properties of the different U.S. shale plays all in one. Our Bajada del Palo Oeste block is in a prime crude oil area of Vaca Muerta. Total thickness reaches up to 250 m, implying a high resource density and consequently, the potential for development of numerous landing zones. Another important feature is pore pressure, an indication of the energy of the rock to produce hydrocarbon. Bajada del Palo Oeste has a pore pressure gradient above 0.9 PSI per foot, defining Vaca Muerta as an over-pressurized reservoir.
Thanks to these properties, Bajada del Palo Oeste has proven to be a highly prolific asset. Equally important has been our ability to maximize well productivity. As Vista, we followed a detailed subsurface phase characterization workflow, including static properties, complex hydraulic simulation models, and numerical reservoir simulation. This allow us to select the best places to land and geosteer the organic horizontal wells within a narrow window of ±3 meters, ensuring optimal well placement. The solid results in our Bajada del Palo Oeste project allow us to increase proven reserves from 52.2 million BOE at operations takeover to 128.1 million BOE as of December 2020. Our wells rank among the best Vaca Muerta and Permian wells measured by 90-day and 180-day initial production.
As our growth plan moves forward during the period from 2022 to 2026, we plan to continue the development strategy of four well pads landed in La Cocina and Orgánico. Our current plan is conservatively built with the current type well, not including further optimizations to our completion strategy. Additionally, we plan to continue optimizing our completion strategy to maximize productivity and returns, providing further upside to our development plan. Our 35-year concessions, with each spanning over tens of thousands of continuous acres across different zones in Vaca Muerta oil window, provide flexibility to continue optimizing our development strategy to achieve this goal.
Let me now give the floor to Raul Krasuk, Vista's Well Construction Manager, who is at one of our drilling sites at Bajada del Palo.
Good morning, everybody, and welcome to this drilling site. Beside me, you can see the Nabors PACE F24 working rig drilling the path number 11 in Vista Bajada del Palo project. We already drilled the first intermediate section as well as the surface section, and currently, we are drilling the second horizontal section of this path. This rig is a symbol of our significant achievement on the drilling site. Since the beginning of Vista operation, we were able to reduce the drilling time for almost 50% from original 30 days to the current 16 days per well on average in the last four well path. This 16 days per well is a record in Vaca Muerta play. This world record was done with the same rig and same crew which drilled the previous 40 wells on this project.
At the same time, frac set utilization reached about 21 hours per day pumping time, which represents a worldwide best-in-class performance. This performance allowed us to reach about 8.5 frac stages per day on average. Our optimization process includes the application of the right technologies as well as a close collaboration with the main service provider.
Developing and testing new techniques and process. Some example of this close collaboration include special drilling fluid design and treatment, casing drilling, bit and BHA design, Flexipipe water transfer, sand boxes, optimize, frac fluid, among others. An important enabler of our performance has been the one team approach which align the Vista commercial objective with those of the main service provider. Both crew receive variable compensation based on the same KPIs. A powerful incentive for the workforce to stay focused on performance improvement with a common goal, reducing the risk of misalignment. As a result of this action, we were able to reduce our drilling and completion cost from $16.6 million in 2019 to the current $10 million per well in 2021, considering a 2,800 m horizontal length and 47 frac stages per well.
These are permanent savings already incorporated in our cost base. Additional cost reduction projects are already in place, such as building our own sand plant from near the location, which is targeted to reduce D&C costs by another $500,00 per well. We forecast drilling and completion costs could reach $9 million by 2026 as far as we implement some of the many initiatives ongoing, such as building a permanent water transfer infrastructure, rig electrification, and continuing the improvement in efficiency. I will now introduce Matias Weissel, our operations manager, who will be joining us from our offices in Neuquén. He will talk about how we have increased production while reducing lifting costs since we took over operations and launched our development in Bajada del Palo Este four years ago.
Thank you, Juan. During the past four years, we achieved a 52% increase in production, mainly boosted by the drilling of new wells in our Bajada del Palo block in Vaca Muerta, where we have drilled and tied in 10 four-well pads, totalizing 40 wells to date with robust productivity. Since we took over operations, we reduced lifting costs from $17 per BOE to $7.5 per BOE, driven by operational and contractual synergies across the assets we acquired, resizing and redesigning our operation to be leaner and by the incremental production from Bajada del Palo, which diluted fixed costs.
A clear example of how we benefit from having our Vaca Muerta development in the same cluster as our conventional assets was a synergy generated by building key treatment and transport infrastructure to evacuate the early shale oil development of Vaca Muerta to the existing treatment facilities, including a 22 km 12-inch oil pipeline from Bajada del Palo to Entre Lomas. This minimized variable lifting costs and the footprint of our new Vaca Muerta production. Another example of how we seek to drive productivity was the redesign of the sucker rod production regime in over 1,000 legacy wells. The result was outstanding. The failure index decreased from 0.7- 0.3 today, cutting by more than half the number of wells with early failure. Looking ahead, we'll focus on technology-based solutions to continue optimizing our field operations.
The implementation of our multi-stage field assisted remote operations will integrate technology, information, and processes, allowing us to further reduce operating expenses, production downtime, and achieve greater operational efficiency. Our plan includes a gradual increase in drilling and completion activity levels in Bajada del Palo Este from 20 new wells tie-ins in 2021 to 40 new wells to be tied in in 2026, doubling production through 2026. The additional volumes in Bajada del Palo Este to be produced at lower variable lifting costs are expected to further dilute fixed costs, lowering our forecasted lifting cost to $6 per BOE by 2026.
To finalize with some color on 2022, next year we expect to complete 16 tie-ins in Bajada del Palo Este, 4 in Bajada del Palo Este, and two in Águila Mora, for a total of 22 new wells that will set us on course for doubling our production in the next five years. Back to you, Juan.
Thank you, Matías. That is all from my colleagues in the field. I will now continue with our safety performance. We have made substantial improvements alongside the activity increase in Bajada del Palo Este Matías just described. As a result of these improvements, we have reduced our total recordable incident rate from 3.9 in 2018 to an estimate of 0.3 for 2021. We have achieved our goal to reduce TRIR below 1 in line with tier 1 international standards in 2020, two years after start of operations. Finally, let me share with you our 2026 production and cost targets. We plan to more than double productions from an estimate of 38,000 barrels of oil equivalent per day this year to 80,000 BOEs per day in 2026.
We will achieve this by incremental drilling and completion activity in Bajada del Palo Este. We also expect to reduce our lifting cost by 20% from 7.5 in 2021 to $6 per barrel in 2026, as growing scale helps dilute fixed cost.
Last but not least, we expect to reduce our development cost by 11% from $7.3-$6.5 per barrel between 2021 and 2026 as we execute additional cost reduction projects, such as operating our own sand mine and permanent water infrastructure to further reduce well cost. Let me now give the floor to Pablo and Alejandro.
Good morning, everyone. We will now review our growth plan and financial strategy. Let me start with our capital allocation priorities, which we have defined seeking to maximize total shareholder return. As portrayed earlier today, we believe our strategy for the next five years will drive significant growth in our net cash generation. Our strategy is built upon clear capital allocation priorities, which are fully aligned with the strong foundations of our corporate strategy, as previously described by Miguel. Our main priority in terms of capital allocation is investing in high return, short cycle projects, mostly in our de-risk flagship Vaca Muerta project in Bajada del Palo Oeste, aimed at generating highly profitable production growth, mainly destined to the export market. Our second priority, driven by our commitment to sustainability, is to invest in decarbonizing our operation. Our 2026 net zero aspiration is supported by two programs.
One, to continue implementing projects that have been prioritized based on our carbon abatement cost curve to deliver a 75% reduction in greenhouse gas emissions intensity vis-a-vis 2020. Two, to launch our own portfolio of nature-based solutions to remove the carbon of our residual emissions. The third priority in capital allocation aims to strengthen our balance sheet by allocating capital to reduce debt, and as a consequence, lower the interest burden of our upcoming cash flows while maintaining a solid cash position, which is key to enjoying financial flexibility. Last but not least, we believe it is of strategic importance to be flexible in the use of the net cash we generate in order to efficiently allocate capital according to changing market conditions. We plan to prioritize using our cash to distribute capital to shareholders via share buybacks or eventually dividends.
In second place, we would use incremental cash generation to further reduce debt. In third place, we would invest in certain low risk, high return growth projects to capture additional upside in our portfolio. Finally, we are also prepared to pursue very selected, focused, and synergetic opportunities to expand and upgrade our development portfolio to generate additional growth. If we do so, we will aim to preserve or increase our targeted net cash generation over the next five years by implementing financing strategies that leverage our top quality assets and our recognized operating capabilities. In summary, we believe we have a simple and solid framework in place to maximize total shareholder return while maintaining a strong balance sheet.
I would like to add some color regarding how our capital allocation priorities translate into a flexible and actionable growth plan, leveraging on the quality of our Vaca Muerta assets and our solid track record as a highly efficient operator. As explained by Juan earlier, we plan to increase activity in Bajada del Palo Oeste from 20- 40 wells per year by 2026. Under these assumptions, we expect our total CapEx to increase from an estimated $330 million in 2021 to $530 million in 2026. We forecast to spend 83% of this CapEx on development, whereas 17% is forecasted to be spent on upgrading and expanding our facilities to increase both gathering and treatment capacity in Bajada del Palo to up to 75,000 barrels of oil per day.
This development plan has flexibility embedded into it, either to accelerate or slow down activity, mainly driven by the small efficient investment units in our plan, each represented by one four-well pad, and by flexible contracts with low standby rates on contracted rigs and services. As a result of these investments, we are forecasting that our revenues will grow by approximately 2.5x in the next five years, reaching $1.65 billion in 2026. This forecast was built using a conservative flat realized oil price assumption of $60 per barrel, consistent with $65 per barrel long-term Brent, both in real terms. Another key driver in our plan is that exports are forecasted to double their share in our total revenues, reaching approximately 60% of total revenues by 2026.
Practically, our entire production growth is expected to be sold in the export markets, which we believe enhances the quality of our revenues.
The combined result of our robust growth plan, which doubles production while reducing costs, is an expected adjusted EBITDA of more than $1.1 billion by 2026, representing an expansion of 3x when compared to 2021. Our adjusted EBITDA margin, which we had already improved to an estimated 58% in 2021, is expected to continue expanding by another 9 percentage points to 67% in 2026. This is driven by the dilution of fixed cost due to increasing production volumes, mostly from Bajada del Palo Este, which has a variable lifting cost of around $4 per BOE, leading to a forecasted reduction in total lifting cost to $6 per BOE by 2026. To put the profitability levels we aim to achieve in perspective, we can use return on average capital employed.
We expect our ROCE to triple from approximately 18% in 2021 to a target of 45% in 2026. This expansion is supported by our capital discipline, which puts our focus on our most de-risked and profitable projects. Selected peers in the oil and gas industry are showing ROCEs of between 4% and 30% with a median of 11%. At 45% in 2026, it should come across quite clearly that our strategy is designed to deliver industry-leading shareholder returns.
I will now present how we plan to reduce debt to gain additional flexibility. Maintaining a robust balance sheet is one of our strong foundations, and we plan to continue building on this. Vista keeps a very healthy debt profile with an average debt life of 2.5 years, with the dollar portion of this debt having an annual average cost of 5.4%. Cross-border dollar debt represents only 30% of total debt, which we consider to be very manageable in terms of servicing. Our short-term maturities are more than covered by our cash position, currently at $290 million, plus an additional $25 million of committed available liquidity and more than $100 million in additional lines of credit approved at Argentine banks.
Our debt reduction plan assumes we refinance only $65 million on average per year through 2026, which is very manageable if we consider that we have raised over $450 million since 2019 in the Argentine debt capital markets. We intend to further strengthen our balance sheet by using part of our cash generation to lower debt from $600 million- $400 million between 2022 and 2026, respectively. This should allow us to reduce our gross leverage ratio from 1.6x forecasted at the end of 2021 to 0.4x by 2026, providing us with ample financial flexibility.
We expect our total operating cash flow, this means our revenues less all cash costs, interest expense, and taxes paid, to reach approximately $3.4 billion over the next five years. Out of this, we plan to use $2.3 billion for capital expenditures, including approximately $15 million in our decarbonization effort. Assuming we run the company with a cash balance of $100 million, this implies we expect to generate cumulative cash of $1 billion between 2022 and 2026. Out of this cash generation of $1 billion, we plan to allocate $200 million to reduce debt, as Ale just described, which means we plan to generate net cash of $800 million in our base case scenario of $60 per barrel of realized oil price.
We expect $200 million to reduce debt, $800 million of net cash generation, all of this at $60 per barrel of realized oil price. Now, going forward, if we have different price scenarios, what should we expect?
That is a factor that distinguishes our plan. Let's assume we face a downside scenario where realized oil prices move down an average $50 per barrel over the next five years, i n that case, we would continue delivering the same production growth, which plays an important role in reaching an efficient scale and still expect to do it with very robust profitability levels. In that scenario, we could finance more of the CapEx with debt, allowing us to still generate the cumulative cash flow of $800 million over the next five years, the same level as in the base case. We would do so still maintaining a robust balance sheet with gross leverage ratio that should not exceed 1.2x EBITDA through 2026.
To showcase the flexibility provided our low cost development plan, in the same scenario, we could alternatively prioritize maintaining our targeted deleveraging and reduce debt by $200 million as in the base case, which would lead to a gross leverage ratio of 0.4x and still allow us to generate net cash of $200 million over the next five years. On the other hand, in an upside scenario, where realized oil prices stabilize at $70 per barrel for the next five years, somewhat more in line with current international prices, we would generate significantly more net cash, reaching $1.3 billion over the next five years. This represents a 62.5% increase compared to our base case scenario and would allow us to even further reduce our gross leverage ratio to 0.3x.
In summary, we believe that these scenarios show that we have built a highly efficient and flexible operation that can rapidly adapt to varying market conditions. This will allow Vista to generate cash flows that are very resilient to weaker oil prices, and that also provide very significant upside potential in case the current high oil price cycle extends in time.
We can now move to Q&A. Thank you, Pablo. We will take a one-minute break before we start the Q&A session. To ask a question via phone, please find the dial-in numbers located on the webcast tab. Once you are connected, you may press star then one on your telephone keypad. We will now begin the question- and- answer session. To ask a question via phone, please find the dial-in numbers located on the webcast tab. You may press star then one on your telephone keypad. If you're using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star then two. We kindly request that you ask one question with a follow-up. If you have further questions, you can go back into the queue by pressing star then one on your telephone keypad.
You may submit online questions at any time using the window on the webcast. Please make sure to mute your webcast when you are joined by phone. The first question comes from Regis Cardoso at Credit Suisse. Please go ahead.
Thank you, Miguel, Alejandro. Thanks, everyone, for taking my questions. Two questions from my side. First one, regarding the business plan targets itself, and then the second one, regarding the cash flow generation you forecast. So first on the business plan, maybe, Miguel, if you could compare this most recent business plan to the ones, you know, to the plans Vista initially laid out when it first acquired these assets and this SPAC. Because if I remember it correctly, I mean, you've made very significant progress in terms of increasing the well productivity, becoming cash flow positive, you know, significantly earlier than expected.
On the other hand, that also came, let's say, in a context of very difficult scenario in Argentina, in which you had to cut back the activity, and that also had implications for the production curve. If you could maybe just, you know, sort of compare what the plan now is relative to the original, the original plan in the first at the time of de-SPACing. Then a second question from my side would be focused mostly on slide 29, where you forecast cash generation of some $1 billion over the period of the plan. I mean, that is very significant, you know, almost twice the market cap of the company, of course, during that period.
I just wanted to make sure I understood it correctly from the presentation, that this is free cash flow after interest payments, after lease payments. I mean, this is cash flow net to shareholders. In regards to that cash generation, if you could, you know, what do you plan? Is it dividends? Is it buybacks? Will you do M&As? What are the uses for that free cash flow generation? Lastly, on the cash generation, if you could also explain, you know, what would make you choose between the two scenarios in the downside case, whether you have the $800 million free cash flow generation or the $400 million with the debt reduction. Thank you.
Thank you very much, Regis, for your question. I will answer the first one. I'm going to take advantage that I'm with the full team here to pass the last part of your question to Pablo. When we, the first part of your question and the comparison between Investor Day and this de-SPACing is something, as you can imagine, that we have replayed many times. I think there's two elements of that question I would like to address, probably you briefly address on one of them. One is the things that we have control of, that is our operation and the key performance metric that we have achieved with our operation compared what we planned at that time. Second is the context.
If we start with operation, I think that is very positive, not for what we are planning now, but for the full plan of Vista and for Vista itself, is that we have managed to achieve much better performance than we planned at the this SPAC-ing time. I will say the first one is reserves. As you know, we plan to have an EUR of 1 million barrels per well. Today, we are at 1.5. Second is the efficiency in CapEx, drilling and completion costs, and also expenses in OpEx. When you look back, I mean, we start our operation with a lifting cost of $17 per barrel, probably up $13 per barrel in development cost. A total $26-$27 total cost to develop one barrel.
Today, we are at a lifting cost of $7, and we are at a development cost of $7.6. We have reduced that by $10. Compared to what we're supposed to be today, we are also probably down by $6-$7 compared to what we're supposed to be today if we follow the plan at the de-SPACing time. I will say the other thing, as you mentioned, that is extremely positive, is that compared with that plan, we are free cash flow earlier. We should not be free cash flow today if we follow the de-SPACing. Of course, the fact that we have managed to reduce expenses and development and lifting costs, in general, give us a better performance on the cash generation side.
I will say another addition to that in a positive way is the fact that we passed through those events, pandemic, reduction of oil prices, international oil prices, Argentina macroeconomy. One thing that has been tested in our operation and for the management team itself is the endurance that we have and the flexibility that we have to readdress any event, in positive or negative. As we address in our presentation, flexibility, agility, and being able to adjust plans in order to continue generating results is one of important trait that we have as a management team, and also is pretty much related with the nature of the resource that we are developing. The second part of your question is related to the context, and it's no surprise that the context has not played us in favor.
When you look at the oil prices that we planned at the time of this SPACing are about even the oil price that we are realizing today, okay? Or very close, around $60. We have not had that pricing across the several years that we've been basically operating. I think this is basically the main effect why our plan, I will say, has been is performing delay, probably around 18 months of delay compared what we planned at the de-SPACing in term of financial results when we talk about EBITDA or it's not the case for cash flow generation, but when we talk about EBITDA. Related to the use of free cash flow, first of all, what you're reading is right. The $1 million of free cash flow generated is after everything.
This is the true free cash flow. We pay tax, and we pay the rest of things, and we generate $1 million that we will use to address our debt. As I will signal in the presentation, we will use $200 million of those $1 million to reduce debt. The rest we will use to distribute or even to address our capital expenditure in the case that we want to accelerate our growth. $200 million for debt, $800 million for distributing to the shareholders or accelerating our plan. The distribution to the shareholders, you have seen the press release yesterday.
We are calling for a shareholder meeting, and that is the first step that we are taking probably for next year, and I think with quite high likelihood of having a buyback program, okay. I will leave Pablo to put more color on what we will do on the five-year plan, including the downside case.
Well, just to shed a bit more light on the downside case, if we realize $50 per BOE instead of per barrel of oil instead of the 60 that we have in our base case plan, we would still be running a very profitable operation. The EBITDA margin would still be at around 60%. Our netback would be more than $30 per barrel per BOE. On that basis, our priority will be to maintain the production ramp-up.
That we have built into our strategic plan. The main reason for that being that we need to maintain an efficient scale of between 1.5 and 2 rigs that allows us to minimize development costs and maintain a very competitive lifting cost. In that scenario of $50 per barrel of realized oil price, we have laid out sort of the two extremes. One in which we prioritize debt reduction, and we can do that with that cash flow profile. We could still reduce $200 million in debt, and we would still have $200 million of net cash flow to distribute to shareholders, which we think is very positive. The other extreme, call it, would be to prioritize the net cash generation to and that can be distributed to shareholders.
In that case, we would finance more of the CapEx with debt. We could still do that with a very healthy balance sheet. If we go to with debt to 1.2x gross debt to EBITDA, we would still be able to distribute to shareholders $800 million. The reality will be most likely something in between, and based on our reading, understanding of the international context and the domestic financial conditions, right? Both we think are very positive scenarios at a more conservative, lower international oil price.
Thank you, Pablo.
We'll move to our next question from Walter Chiarvesio at Santander.
Yes. Hi, good morning. Thank you for the presentation. I would like to ask, how confident you feel about your net zero plan, what are the risks and how confident you are for achieving that, on one hand? The second question is, how do you see... I know this is a presentation for the longer term, but how do you see the short-term dynamics of pricing in Argentina next year, given the already known macroeconomic, volatility at the FX front? How do you see the export market for, specifically for the company? How that, would help to shore up the, up the price that the company would receive in the short term next year, 2022. That's for my side. Thank you.
Thank you very much, Walter. So let me start with the second part of your question, and then we will address the net zero plan that is probably the fun one. From the short-term dynamics of FX, you know, we are quite experienced in Argentina. We've been through this before. Yes, clearly we have the capital of the FX today between pesos and dollar. Nevertheless, I mean, we are not foreseeing for what it mean for us. We are not foreseeing for this plan anything that can impact in the short term. As when you look at the composition of our plan price-wise, we have two effects. One is the export and one is the local market. In the local market, we're assuming realizing prices of $55.
These realizing prices of $55, when you look at the price at the pump today, is something that we feel super comfortable with. That meaning that today that prices can pay even higher prices than $55 for producers. When you look at the margins of the refining business, clearly we today could build a plan above $55 in the local market for producers. When you look at the other side of our pricing, that is export, and they are realizing 70, and the combination is the 60 that you are seeing. We have been successfully able to address the international market and to access that international market.
When you look at the blend price and when you look at what we are realizing, also we feel super comfortable because today, Argentina is fully supplied of crude oil. When you look at the plans, our plan and the plans of the other people that are operating in Vaca Muerta, it's clearly we are all in the growth path, different rates, probably different impact on growth. Most of the main players in Vaca Muerta are toward a growth path. It's clear that the refinery capacity is not going to increase. The market is fully supplied. Everything that is additional, like the plan that we are providing to you today, is going to be to export.
We clearly believe that we can increase export as our plan develop, and this is not something that's going to happen to us, it's going to happen to the industry in general and in Argentina. The other thing that you have seen that is related to that and is not addressing your question is that the price of crude oil in Vaca Muerta in the market, because of the discount, we have managed to address our market in a very positive way. Today we are having discounts that are $3 or $4 below what we used to have before. We are addressing that market with very short discount in Medanito or commercial due to the quality of the crude oil and the appetite for that crude oil in the international market.
Net zero plan. The short answer to your question is we feel super comfortable we have put together. This is not something new, it's not something that we have prepared for this meeting. There's more than a year that the team have been working in a plan to address our ambition to be a net zero producer that we see as a big opportunity for a company like Vista. With that said, I think our initiative have two sides of the story, and I would like the people that we meet today, Pablo and Gabriela, to basically address that for you.
The two sides is how we reduce our carbon footprint in operation, and the other side of the story is how we reduce what is left and how we offset what is left using nature-based solutions. Gabriela.
Thank you, Miguel. As far as reducing the carbon footprint in operation, we have set a very detailed plan that year by year is telling us exactly what kind of projects we are going to implement. As an example, we have started already with the deployment of some of these projects in 2021. Some of them are things that technology that is already in use, so it's solid technology, it's proved. We are implementing vapor recovery units to capture the methane that otherwise it would have been venting. We are changing and optimizing the operational parameters of the glycol dehydration units. Then finally, as well, year- on- year, we have a plan to implement electrification of the compression systems, as well as introducing renewables into the matrix of Vista.
Just to complement Gabriela, I mean, we coming from 360,000 tons of CO2 in 2021. We are going to be at 2022 at 265,000 tons of CO2, and that is what we have to set with nature-based solution, something that Pablo will address now.
Yes, Miguel said, we've been working since beginning of the year. We have engaged experts in the field. We think Argentina has a lot to offer in this very new, exciting space. What we have done is identified concrete projects that can deliver carbon removals consistent with our plan to offsetting the residual emissions of our operational carbon footprint. Essentially, this will be projects in regenerative livestock, regenerative agriculture, in forestry plantation and forest conservation. This will be a portfolio approach to mitigate risk, and these are all identified and with concrete CapEx plan that we will start rolling out at the beginning of next year.
Just one comment. Both plans are included in the $15 million that we accounted for in CapEx in the plan.
Yeah. Nature-based solutions, we believe, provides a very cost-efficient solution to carbon removals. That's why we are prioritizing that, and because Argentina, again, has a very competitive projects and capabilities to offer in this new exciting space.
While they're wrapping up, it's a very complete plan. It's a plan that we have studied a lot. It will take a $15 million CapEx run rate when you take both initiatives, what we are doing in the operation, plus what we are doing in nature-based solutions. It's something that we feel super comfortable, and we see it really as an opportunity to deliver not only low-cost, but also low-carbon barrels to the industry and to the market.
We will take our next question from Alejandro Demichelis at Nau Securities.
Yes. Good morning, gentlemen. Thank you very much for taking my question. A couple of questions, please. The first one is, you laid a very clear plan on Bajada del Palo Este. Maybe you can touch on what your plans are for the rest of the shale blocks, Bajada del Palo Este, and the new blocks, and how you see that kind of adding to your production. That's the first question. The second one is on the ESG front, and you have been very clear here. Maybe you can touch on how you're thinking about water usage, water handling, and how much of a constraint that could be in the future.
Super, Alejandro. Thank you for your question. What you have seen in the plan is mainly Bajada del Palo Oeste. Okay? We have included five to seven wells on Bajada del Palo Oeste. Four wells that we are going to drill now, two wells that we are going to drill in a part farther east, and then one well that we are going to drill later on in the plan, really farther east, okay? That's for Bajada del Palo Oeste. In terms of Águila Mora, there's two wells that we have included in the plan that also fulfill our commitment that we have with the province in Águila Mora and no further activity for the moment.
For Aguada Federal and Bandurria Norte, that, as you know, is an early acquisition that we have done, w e are discussing budgeting, so we have not included anything there. The commitments, there's no firm commitment in these two blocks, so we don't have to rush, and we are discussing what will be the plan for those two blocks. That is pretty much. That doesn't mean that if the oil price scenario, the price of oil, plays in favor in the next few years, even higher than the one that we have presented in this plan, that it is possible that we don't accelerate signing of the blocks because we see in most of them good potential.
In terms of ESG and water usage and water handling, I will ask Gabriela to answer that question.
Thank you, Miguel. We all know that water is precious and a very scarce resource. It's a priority for us to optimize the use of water, and it's a very important resource for our operations. We need this resource to be able to develop the Bajada del Palo Este, right? The way we operate our facilities is with respect to the use of this resource. Every single source of water catchment is monitored, is tracked, and is definitely feeding into the reports that yearly we submit to the authorities. Now, because this is a very important resource, we are building our water management integrated strategy. This will go along with a solid action plan to optimize the use of the resource.
This goes hand in hand with the goals that are established in the Sustainable Development Goal number six, which is the one that talks about water availability and sanitation.
Alejandro, probably another thing to mention on water is one of the things that we are collaborating with our partners and people in the industry. In the case of water and other infrastructure, I think one of the progress that we have made in Vaca Muerta that today we have a more coherent and, as we said, we do things together with the people that operate. Water is one example of that, is one of the places where we collaborate particularly with Shell, and investment helps both operations.
We'll take our next question from Guilherme Levy at Morgan Stanley.
Hi. Hello. Good day, everyone. Thank you for taking my questions and for hosting this event. My first question is on capital allocation. You mentioned that the excess cash generation of $800 million at $60 per barrel oil can be used either to remunerate shareholders as well as to accelerate CapEx. I was just wondering which are the triggers or what could make you more positive and decide to allocate more cash in growth rather than on shareholder remuneration. If it's more related to encouraging results from the wells in blocks other than Bajada del Palo or eventually a more positive macro environment in Argentina. My second question is more related to the sector.
If you could perhaps comment on the current level of appetite from international oil companies to deploy capital in Vaca Muerta. If you think that there could be more divestment opportunities from international companies in the country that could potentially open more room for Vista to add more acreage going forward. Thank you very much.
Thank you, Guilherme, for the question. It's a very good question, so I will start with the second part. International companies in Argentina, yeah, it's sometimes present opportunities for the investment like happened with ConocoPhillips, but the reality is there are many international companies today in Vaca Muerta that are growing. Just taking public information, for example, two that been playing in Vaca Muerta similar stage, Shell and Chevron. When you look at the public information at what they have done during the last five years and what we need, the ambition that they have, they are both clearly growing.
We see international oil companies also very committed, very aware of the quality of the resource, and also they've been participating in the reduction of development and lifting costs as you have seen it. Yes, we could foresee that there could be another opportunity on M&A that addresses acreage of international company. But I think what we see them more is that these companies today are growing in production and also have ambitions to invest more in Vaca Muerta. Regarding capital allocation, what could drive more CapEx growth in activity? Definitely, international oil prices and how that relates to Argentina, it will be a clear driver of generating more cash and also investing more, part of that cash in CapEx.
We are not short of resources. That is very important because we could have CapEx and a company that is growing at the rate that we are growing will be difficult for a company like us to have more access. This is not the case for us. We just showed in 2020 a replacement reserve ratio of 300%, okay? When you look at our plan in Bajada del Palo Oeste, we will consume or we will drill and complete 150 wells of a 450 well portfolio just in Bajada del Palo Oeste. That means after 2026, we have 300 more locations to drill and reserve to book. And that's not taking into account Bajada del Palo Este, doesn't take into account Águila Mora, neither Aguada Federal and Bandurria Norte.
Therefore, if the oil price play in our favor, clearly we will have opportunities to increase CapEx. What other things could happen? I mean, we would as we show in the plan, we believe that we will further reduce development costs and lifting costs. We plan to continue improving in our key performance indicators, and that also can be a source of investment. I don't know, Pablo, if you want to comment on that question.
Yeah. Perhaps on our strategy to develop the other blocks that we're de-risking now, right? Obviously, we are betting we're confident that the results in Águila Mora or Bajada del Palo Este are gonna be positive based on the geological conditions. We do have an ambition to develop them as well. We will look into, call it, creative or financing strategies as the one we have done with Trafigura and Bajada del Palo Este to also access third-party capital to help us with the development of that. Because although we're willing to put up more of our capital into the development of blocks, the order of priority that we have laid out is clear. We want to distribute share back to shareholders, and we also want to reduce debt, right? Those are our two priorities.
We have no further questions via the phone. I would like to turn the conference back to Mr. Alejandro Cherñacov, who will be reading additional questions from the chat.
Thank you. We have a few questions from the audience I will start with. The first one is based on reserves. In this growth plan, how do you expect proved reserves to evolve?
Yeah, that's a very good question. When you look at our last official number, that is 2020, we have shown a reserve of around 128 million barrels with a reserve replacement ratio of 372%. I mean, we are finishing 2021, and we believe we will be even above that number this year. We plan to double production in 2026, as we have shown on the plan. We move from 40, today we are producing 46, all the way up to 80,000 barrels of oil per day. That is doubling the production. We believe in reserve, we will much more double reserve than production.
That means we can be about 2x and probably even we could imagine of a 3x multiple in reserves. That is related to the stock that we have in wells. You could expect that we will continue growing on average as a ratio of about 200% in reserve replacement ratio.
Thank you, Miguel. The next one is, can you give us production guidance for 2022, which I think we covered, and 2023? Do you still plan to concentrate in oil even though there might be a new gas pipeline in Argentina?
Yes. The guidance as we have given for production for 2022 is 46,000 barrels of oil per day, and for 2023 will be about 50,000 barrels of oil per day. You have seen in the presentation the ramp up all the way up to 80. As you know, because the nature of the resources that we are drilling, we are becoming progressively more oily. We are today around probably 80%. We will see that in 2023, and all the way to 2026, that we will move between 85% and 90% of oil, and we will be less gassy. Do we have an ambition to play in the gas arena?
Right from the beginning, we said that we like oil because of the fact that we believe represent better quality of revenue. We sell to refineries, we sell to the market, we have market price, and we like that. We have not changed on that sense. We believe that we will continue focusing oil based on also on the resources that we have. That's not discarded that if at some point of time we believe gas is good for us, we can make a change. It's not the case today. We continue focus on oil. Any other questions?
Yeah, Miguel. I wanted to ask if ramping up to 40 wells per year being drilled implies that you're operating just in Bajada del Palo Este or part of this drilling is actually included any other new well, any other new field there?
All right. Yeah. I would like to pass that question to Juan.
Okay. Well, thank you, Miguel. Well, basically, as Miguel just said, the plan that we have today is mainly focused on Bajada del Palo Este. We were planning to drill seven wells in Bajada del Palo Este and two wells in Águila Mora, but that is all that we have in blocks that are not Bajada del Palo Este. Mainly all or most of the 144 wells, almost 95% of those wells are to be drilled in Bajada del Palo Este.
Bajada del Palo Este we are drilling as we speak, no?
As we speak, we are drilling in Bajada del Palo Este, and we're bringing one additional rig today. We'll have t wo rigs for the first part of 2022. We will continue at that pace for the next two or three years with 1.5 rigs average in Bajada del Palo Oeste.
Okay. We have two more questions, Miguel. One of them is what is your current vision of the environment of the international oil market? How sustainable do you see current levels? Do you see greater upside and downside risks in the medium term?
We are bullish about the short-term environment in terms of crude oil prices. That is backing a few things. I mean, we believe and we share the view with several analysts that the demand of crude oil toward 2050 is going to be super strong. We see the demand of energy doubling from now to 2050. When you look at that gap of increasing in demand that is related to the demographic expansion and economic expansion of the world, how that is gonna be covered, we clearly believe that it will require of oil and gas playing a very important role.
We come particularly to oil, when you come to the supply side of the story. We see that today, compare with pre-pandemic numbers, we see the activity of the water have not come up all the way up to where it was before. We see the activity in unconventional oil in the U.S. hasn't come up all the way up to where it was. Probably it's half of it was before. Partially because it's a resource that also has been already drilled and already partially consumed. Probably the appetite for that kind of business is not there at the same level today. Nevertheless, also we see OPEC+ playing a very important role, doing exactly what they said that they have to do and they are doing.
We also see very little elasticity for OPEC to increase production rapidly from one day to other. All those fundamentals, all those elements make us think that we are in an environment where we are going to see, in the medium term, basically strong prices and we are betting on that.
Yeah. One last question here. Can you please discuss further how you will differentiate between buybacks and dividends?
Well, we are not planning dividends in the short term. What you will see next year is that we will strongly consider to have a buyback program, and we are preparing basically for that. It will come the time for us to have a dividend policy is not today. We plan to generate $1 billion of cash in the next five years. First we want to reduce a bit our debt that today, as Pablo mentioned, we are in a very healthy, in a very good position.
We have very strong balance sheet. We will finish this year with a net debt ratio versus EBITDA of less than 1. Therefore, the other thing is how we use the rest of the $800 million. We believe part of that has to be back to the shareholders. $800 million is a lot of cash. It is double what we value today. Therefore, part of that is going to be distributed starting next year, probably with a buyback program.
Okay. Thank you, Miguel. I don't have any more, so we can actually conclude the call.
Well, thank you very much for your permanent and continued support. Thank you very much for the one that have joined this presentation in this new modality, post-pandemic. Hopefully, we will get back to you with an investor day, really in the field in Vaca Muerta, as we did previous to the pandemic. I would like to take advantage now to thank you, to thank all the employees at Vista for their continued support, for their continued hard work, for their continued commitment to our operations. These numbers that we have shown, we have the privilege to show to you during this presentation, it has not been manufactured by us. These are people behind the scenes, at the drilling rigs and the production plants, geologists, geophysicists, reservoir engineers that have really made this thing happen.
We are very proud of that, and we thanks all of them for being part of Vista and for being able to deliver the result. Thank you very much and have a good day.
The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.