Good day, thank you for standing by. Welcome to the Vista Third Quarter 2021 Results Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star one on your telephone. Please be advised that today's conference is being recorded. If you require any further assistance, please press star zero. I would now like to hand the conference over to your speaker today, Alejandro Cherñacov. Please go ahead.
Thanks. Good morning, everyone. We are happy to welcome you to Vista's third quarter 2021 results conference call. I am here with Miguel Galuccio, Vista's Chairman and CEO, Pablo Vera Pinto, Vista's CFO, and Juan Garoby, Vista's COO. Before we begin, I would like to draw your attention to our cautionary statement on slide two. Please be advised that our remarks today, including the answers to all 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 in accordance with International Financial Reporting Standards. However, during this conference call, we may discuss certain non-IFRS financial measures, such as adjusted EBITDA.
Reconciliations 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 Oil & Gas, is a [Non-English content] organized under the laws of Mexico, registered in the Bolsa Mexicana de Valores and the New York Stock Exchange. The tickers of our common stock are Vista in the Bolsa Mexicana de Valores and VIST in the New York Stock Exchange. The ticker of our warrants is VTW408A. I will now turn the call over to Miguel.
Thanks, Ale. Good morning, everyone, and thank you for joining this earnings call. I am delighted to share with you our results of the first quarter of 2021, during which we have continued our profitable growth path and recorded positive free cash flow. During Q3 2021, total production averaged 40.3 thousand BOEs per day, a 59% increase year-over-year. Oil production was up 77% year-over-year, boosted by our development in Bajada del Palo Este, where we have already tied in 60 new wells year to date. Total revenues in Q3 2021 were $175 million, a 150% increase year-over-year, mostly driven by the increase in oil production and stronger realized oil and gas prices.
Lifting costs per BOE was $7.3 for the quarter, a 26% reduction year-over-year, reflecting that low marginal costs in Bajada del Palo Este continue to dilute our fixed cost base. Adjusted EBITDA was $102.9 million, implying a solid adjusted EBITDA margin of 59%. Capital expenditure for the quarter was $74.1 million, in line with execution of our 2021 guidance and reflecting the completion of our four pads for the year in Bajada del Palo Este. During Q3 2021, we generate positive free cash flow of $51 million, driven by robust cash flow from operations and our A&D transactions. Cash at the end of the period was $266 million.
Net debt stood at $337 million, implying a healthy net leverage ratio of 1.1x adjusted EBITDA. We will now deep dive into the main operational and financial metrics. Total production during Q3 2021 was 40.3 thousand BOEs per day, up 59% interannually. Production growth continues to be driven by our flagship development in Bajada del Palo Este, where we tie in three pads in the first half of the year. We'd also tie in a four pads, number nine, in late September. This pad landed two wells in La Cocina and two wells in the Orgánico, with an average length of 3,078 meters per well and 61 average stages per well. Note that this pad did not contribute with production during the quarter.
Given the high oil mix in Bajada del Palo Este wells, we see a higher growth of oil production rate, which increased 77% year-over-year. During Q3 2021, we also tie in a gas well in Entre Lomas concession, targeting the Punta Rosada formation. This well is driving our sequential gas production growth, capturing high realization prices in the winter with a small CapEx and delivering on our planned gas commitments. Total revenues in Q3 2021 were $175 million, a strong interannual increase driven by the boost in oil production and realized oil prices. Realized oil prices for the quarter averaged $57 per barrel, up 46% year-over-year and 4% quarter-over-quarter. Sales to export market accounted for 18% of the oil volumes, with a sales contract signed. With Brent trading around $72 per barrel.
We still see pricings of our exported oil with discounts to Brent of less than $2 per barrel. The domestic market accounted for 82% of our total sales in the quarter, with the crude oil prices of approximately $55 per barrel. We continue to execute our strategy of building a sale book early on to lock in revenues and fund investment activities. Our entire Q4 oil sales volumes, with approximately 30% of export volumes, have already been locked in at an average realized prices of around $60 per barrel. Realized gas prices increased 89% year-over-year to $4.1 per million BTU, boosted by the gas plant winter price of $4.1 per million BTU, applicable to approximately 67% of our total volumes.
Industry prices increased from $2 per million BTU to $4.3 year-over-year. Moving to slide six, we will have a look at our lifting cost performance. Total lifting costs for the quarter was $27.2 million. We have managed to maintain lifting costs virtually flat quarter-over-quarter, despite pesos FX appreciation in real terms. Lifting costs per BOE was $7.3, down 26% year-over-year, as incremental production from Bajada del Palo Este continues to absorb our fixed cost base. Sequentially, we maintain flat lifting costs per BOE with a stable production. Adjusted EBITDA for Q3 2021 stood at $102.9 million. We have quadrupled adjusted EBITDA inter-annually, reflecting a boost in revenues amid a stable lifting cost.
Adjusted EBITDA stood flat [Non-English content] the previous quarter, even though it does not include operating income generated by the JV with Trafigura, which added approximately $5 million in Q2 2021. Our adjusted EBITDA margin and net back have remained strong in the quarter at 59% and $27.8/BOE respectively. Moving to slide eight, I will review our financial situation. During Q3 2021, we have another positive free cash flow quarter for a total of $51 million. Cash flow from operating activities was $110 million, six times higher than in Q3 2020. Cash flow used in investing activities was $79.3 million, partially offset by the cash received through the acquisition of ConocoPhillips Argentina operation and the divestiture of CASO to Shell for a net of $58.9 million recorded for the quarter.
Cash flow used in financing activities was $22 million. Debt stood at similar levels, and we paid interest for $25.5 million, including the semi-annual payment on our syndicated loan and the full interest cost to date of [Non-English content] that were canceled during the quarter. In Q3, we repaid a total of $112.1 million in loans and dollar-denominated bonds. We also raised the equivalent of $110 million in the Argentine capital market in two dollar-linked bonds. Tranche 11 was $9.2 million bullet in four years with a coupon of 3.48%. Tranche 12 was $100.8 million amortizing, due in 10 years, with a coupon of 5.85%. These issuances constitute robust step to pre-finance 2022 maturities.
The average debt duration have increased from 1.4 years at the end of Q2 2021 to 2.7 years at the end of Q3 2021. Net leverage ratio has decreased from 1.7x adjusted EBITDA at the end of the previous quarter to 1.1x adjusted EBITDA at the end of Q3 2021, reflecting how cash flow from operations drives organic deleveraging. Moving to the business development front, on September 16, we acquired a 50% working interest in the Aguada Federal and Bandurria Norte concessions from ConocoPhillips.
Vista made no up-front payment to control of the acquired entity that has $6.2 million in cash and assume the outstanding investment carry of $77 million due to Wintershall Dea, 50% JV operating partner of the block. We also obtained from the seller a five-year bullet line of credit of $25 million available for 24 months at LIBOR + 2%. The rationale for this transaction is strong, as these assets fit perfectly into our development strategy. The price of $2,800 per acre is low compared to the recent Vaca Muerta M&A transactions. With this deal, we expand our portfolio of development wells, adding approximately 150 new well locations. We expect to contribute our Vaca Muerta expertise and low-cost operating track record to the JV.
Finally, the proximity to Bajada del Palo Este of the purchase assets, in particular Aguada Federal, could lead to important synergies in terms of contractors, treatment facilities, and logistics. In short, with this transaction, we have added core acreage to our portfolio without stressing our balance sheet and strongly contributing to our growth potential and shareholder value creation. During Q3 2021, we also made good progress on the ESG front. We are currently executing three projects aimed at reducing 100,000 tons of CO2 equivalent on an annualized basis. We expect to achieve a 30% reduction in our emissions intensity to approximately 29 kg of CO2 equivalent per BOE in 2021. This leaves us in a good starting point to continue reducing emissions intensity during 2022. In the meantime, we continue to work on our long-term greenhouse gas reduction goals.
During Q3, we have identified material projects in order to build our decarbonization plan. We are currently finalizing our carbon abatement cost curve, which is the cornerstone of our multiyear action plan to reduce greenhouse gas emissions and set corporate reduction goals. Moving to slide 12, I will present our revised guidance for the year, which has improved on the back of strong execution and higher realization prices. Note that the updated guidance of this slide is compared against the guidance issued in the previous quarter, which was an improvement compared to the original guidance from 2021. We have already tied in 16 wells during the year, and we are on track to tie in the 5th pad of the year for a total of 20 wells by year-end. We have finished drilling this pad and will start completion in November.
The rig has moved to a new location to drill the sixth pad of the year and is expected to deliver four additional drilled and uncompleted wells by year-end. As part of this decision to accelerate activity, we brought a spudder rig to drill surface and intermediate sections of three pads of the 2022 drilling campaign. We forecast this acceleration in activity will have a positive impact in our 2022 production plan. We are confirming our revised production guidance in the range of 38,000 to 39,000 BOE per day. Year-to-date production is 38,100 BOE per day, and we expect the production from the four pads of the year recently tied in to drive Q4 production to higher levels. We are also confirming our lifting cost of approximately $7.5 per BOE for the year.
Year-to-date lifting cost was $7.4 per BOE. We forecast this metric to remain in this range in Q4, despite pressure on cost by peso appreciation in real terms that we have seen in Q3. We are revising upwards our adjusted EBITDA guidance from $325 million to $370 million. Adjusted EBITDA has been positively impacted by additional production, higher realization prices from Q2 onwards, and lower lifting cost per BOE. Based on additional activity in Bajada del Palo Este, we are increasing our CapEx guidance from $310 million to $330 million. A quick comparison of the graphs at the bottom of our screen shows we are not allocating the entire increase in adjusted EBITDA to capital expenditure, reinforcing our capital discipline and focus on free cash flow generation.
Finally, we are improving our net leverage ratio guidance from 1.1 to 1x adjusted EBITDA by year-end. This reflects our successful refinancing effort during the year, as well as the organic deleveraging driven by the operating cash flow generation. Gross debt guidance increased from $500 million to $600 million at year-end, reflecting the successful ten-year tenor bond issuance in Q3 2021 at an attractive cost to prefinance 2022 maturities. To finalize this call, I will recap on today's headlines. In Q3 2021, we have seen a strong performance across all key operational financial metrics, recording a $51 million free cash flow. Bajada del Palo Este continues to show solid results. We tie-in our four-well pad year-to-date, which leaves us on track to deliver 20 new well tie-ins for the year, accelerating our 2022 well program.
In terms of cash, in Q3 2021, we successfully issue $110 million in new bonds at a competitive rate, extending average debt duration to 2.7 years and pre-financing 2022 maturities. On the business development front, we acquired 25,000 core acres in Vaca Muerta, adding approximately 150 net new well locations to our portfolio. Finally, as shown in the previous slide, we updated our 2021 guidance on the back of a strong year-to-date performance. Before we move to Q&A, I would like to announce that we call for the shareholder meeting scheduled for December 14. In this meeting, we will initiate the process to seek formal approval for a potential share buyback program or dividend payment in early 2022.
Today, we are announcing Vista's first Investor Day, scheduled to take place on December nine and hosted by the executive team. During this event, we will present our updated strategy and new long-term targets. I will now take a moment to thank our investors for their continued support and interest in our story, and a special thanks to all the talented people that work at Vista for their extraordinary commitment to our company. With that, operator, please open the line for Q and A.
Our first question comes from the line of Walter Chiarvesio from Santander. Your line is now open.
Hello, good morning. Thank you for the call, and congratulations for the good results and performance during the year and the quarter. I have three quick questions. The first one is regarding the dynamics between the export of oil in Argentina and the local sales, I would say. Basically, or in particular, why would you or why couldn't you export more in order to increase the average price that you are receiving? That is my first question. The second question is, what would you expect with the oil price, the local oil price, if we have the devaluation of the currency next year, especially in the case of a discrete increase in the price of the dollar?
The last one is, what I saw is that, you are planning to drill four new wells in the first quarter that is not completed but will be completed in the first part of 2022. Is that correct? That is my question. Those are my three questions. Thank you.
Hi, Walter, and thank you for your questions. Let me start first with the pricing related to exportation. That probably is more of a big picture question. From a very I would say an overview on a big picture of what happened in Argentina with the prices. As you know, the prices in Argentina, what we are receiving is a combination of the local price with the export price of the volume that we export. Now, I think the important thing here to understand is that volume that we export, it depends on how much Argentina overall produce. Today, Argentina are different as they were probably eight or seven years ago.
We are clear in the path of being, having no problem in fulfilling the demand of the local market and becoming, year by year, a bit more of a net exporter. When you look at the situation, you have the capacity of the refineries topped up, so we are not building any new refinery in Argentina in the near future. Therefore, the demand and our capacity to produce gasoline for the country is top. And everything that we produce in excess will go to the export market. Now, when you look at what we have produced year to date in excess in 2021, we have increased our production 7%. From that 7% of production, 31% come from Vaca Muerta, and conventional fields have declined 1%.
Saying all that, what I'm saying is, today we are not in a situation of a scarcity that we used to be in Argentina when we have to import oil. Our domestic market is fulfilled. Every single barrel that we produce on top goes to the export market. Now going to the export market, we first of all, the local price today, what our realized price has been around $55. We have seen prices increase during the year, but we have not seen prices increase during the last few years, and we have seen international pricing going up. Today, we have an issue, and the issue is that we are a bit too decoupled of the export parity. We believe we will have a correction.
In election years, no matter what government is in charge, we have always seen a delay on the transfer of pricing to the pump. I believe after elections we should see a movement coming from the integrated players in the country. When it comes to the export, well, we see really the pricing that we are realizing, as you know, fully aligned with the export with the Brent prices and with a discount, that is the discount that we know. We have a discount on quality that the last tender that we had was less than one. We have the export tax, and that gives you 10% to 11% reduction on the Brent pricing.
We've been very successful, basically tackling that market. When you look at the 2020 and 2021, we did have an additional cargo that we export this year. For us, that portion represents today 30% of our production for the year. That means 30% of our production of the year we have allocated to the export market. That's your first question. Let me go to the second question related to drilling plan in Q4. We finished drilling our fifth pad of the year, is what we call or what you've seen in our maps, for you guys, it's Pad Ten, with an average lateral length of 2,100 meter. Currently it's starting completion.
We plan to tie in this well in Q4, most likely will be December. We are then moving the drilling rig to a new location that is Pad Six of the year, so our sixth pad of the year. That is expected to, this rig is expected to deliver four additional drill and complete wells by year-end, okay. Those wells are going to be completed in 2022. Also, we brought a spudder rig to drill surface and intermediate sections for three pads. That is already on today, starting to drill our first pad. That is more related to the campaign, the drilling campaign of 2022. The idea of that is to accelerate activity, and that for sure will have a positive impact in our production plan in 2022.
Going for your last question related to the devaluation impact. Well, we've been through that before. The devaluation impact have usually in Argentina, a positive impact on the CapEx, a positive impact on the lifting costs because dilute our pesos price in dollars when it come to basically costs of both development and lifting, and have a negative impact historically in our top line because we see a spike that of the devaluation or a drop on the top line that is difficult to transfer at the same moment instantaneously into the pump. Usually take few months to recover. I think before seeing a devaluation, we need to see a recovery in our price pricing in the pump.
That's, I mean, if we have a devaluation effect, it clearly will hit our top line. It's going to benefit us on the cost side. Walter, I hope I have answered your question.
Yeah, thank you very much. That was perfect.
Thank you. Our next question comes from the line of Vice President Equity Research . Your line is now open.
Hi. Good morning, Miguel. Good morning, Alejandro. Congratulations on the results. Two questions from my side. First one is regarding the last slide on presentation where you talk about distributions either in the form of dividends or buybacks. How do you, I mean, how do you envisage that capital allocation between accelerating the development of Vaca Muerta, given that you still have a very substantial inventory of wells in Bajada del Palo and you know acquired additional assets, so you have, you know, plenty to do in your existing assets. At the same time, of course, shares have been very undervalued as a result of, you know, the very high discount rates in Argentina and so on. Of course, the buyback would also make sense from that perspective.
My question really is how do you know, how do you balance that view? Is that the additional, the marginal cash generation that you will use, do you need to set some money or some cash aside for servicing the debt because you might not have access to dollars because of capital restrictions, foreign capital restrictions in Argentina. You know, if you could comment on what are, you know, how do you balance capital allocation, where do you get the resources from given the capital flow restrictions and how do you balance between distributions and reinvesting the existing assets? That's one of the questions. I'll go ahead with the second one.
Just very briefly, it's something you already touched on, but when we think of the spread between Brent prices and realized oil prices in Argentina, what do you think are the discussions that are still open? Is there anything in the Hydrocarbons Law that could change that spread? Is it still mostly the dynamics of whether the refineries are able to pass it through? Is it something that you believe you will develop more of an export market for your oil? I mean, can you actually reduce that spread between realized oil price and Brent prices? Thanks.
Thank you, Reggie, for your question. Your first question is probably it's time to set up the stage for really the detailed discussion that we are going to have in our investor day in December. It's a very good question, and let me touch briefly on that. First of all, I will say the important thing or the most important thing is that our operation, the results of our operation, basically our performance in terms of cost, lifting and development, that you know we have managed to take the operation from the $30+ that we were all the way down to probably between $7 and $14 of development costs and lifting costs due to the performance of our operation.
Performance of our reservoir in terms of a strategy for completion, high intensity fracking and the placement of the well, and also on the strategy of cube that we have to have an operation that generates consistently, and that is very important, positive free cash flow. We are now at that stage. How we think that the utilization of this positive free cash flow going forward, as you said, in the environment that we are, okay, with all the positive and the constraints as well. First of all, we have the ambition, and we plan to continue growing. We are a growing company, and we will continue growing at double-digit rate, not only in production but more importantly in profit and EBITDA.
That is our main priority. Now, with the free cash flow that we plan to have, I mean, we believe we can do more than that. The second thing that you will see that we will address, I will say that at the normal pace, is to use that cash flow that we have to deleverage the company, okay? It's not that we have a problem of leverage today. We will probably end up the year at 1x net debt versus EBITDA or probably lower, okay? I think it's a good policy for us now we are having that cash to continue deleveraging the company.
Second or third, the way that we think about distribution, we see the distribution as a total return to shareholders, okay? That total return to shareholders can be in two forms, okay? One could be a plan to buy back shares, but today it probably doesn't make a lot of sense. Second, there could come a point in time that we could have a dividend policy. We have not made a decision on that, but where we have made a decision on that why we are preparing our holding company to receive these new positive results from Q4 onwards is to be able to distribute in one of those forms part of our free cash flow that we are generating. Okay? That is for your first question.
Brent to realized prices. Again, I think it's back to the previous question of Walter. I mean, in this basket, it will depend on our ability as a industry to continue growing as a industry and as a country because it's needed for industry, it's needed for the country as well to continue growing our production base. They are forced to have more excess of barrels to export. I think this is the name of the game for Argentina. The Hydrocarbons Law is a Hydrocarbons Law that I don't think is touching the local prices.
It was originated to address part of the constraint that we have that you mentioned, and you know, distribution of cross-border. I would say cross-border be able to move products across the border in a country today that we are exporting. What, on the other hand, we continue needing investment because in order to grow our production base, we continue to need investment, and we need more investors and more companies coming to Argentina. I think that was the origin of the idea of having a law that incentivize that investment. I think if the law address that, I think we are winning something. For that, you don't need more than four articles in the law. Today we are discussing hundreds.
I think that is a bit too much. Okay? No need it. We have a law that we passed in 2014 that it has been working extremely well in terms of the legal framework of the Hydrocarbons Law. What we need is four articles in the law to incentivize investment, to grow production, to create work for the country and to become a real and serious net exporter in a country that we have that potential. If that law with those four articles address that, it would be a good thing that this government does.
Very clear, Miguel. Thank you very much for the complete answer.
Thank you. Our next question comes from the line of Guilherme Levy from Morgan Stanley. Your line is now open.
Hi. Good morning, everyone, and thank you very much for taking my questions. My questions are actually related to the newly acquired acreage from ConocoPhillips. I just wanted to understand how should we think about investments in these new blocks that are operated by Wintershall. How does the operator think about production ramp-up into the coming years and the drilling campaign at those areas? Also if you could comment on the expected attractiveness and productivity of those areas, comparing those with what we have seen at Bajada del Palo Oeste. Thank you very much.
Thanks, Guilherme, for your question. Well, first of all, to say that it was a very good acquisition for us. Both blocks, Aguada Federal and Bandurria Norte, are concessions that we know extremely well. We were in the process at the time that ConocoPhillips bought those areas. For us, it's nothing new. The fact that we have managed to make a transaction, we know that the payment and even just assuming the outstanding investment carry that it has with them, I think it was a very good deal.
The asset fits, first of all, perfectly our strategy because it's not only that are high quality asset, also are neighbor assets to our operation would have very strategic value for us, particularly, I will say it, Aguada Federal. With Wintershall, we have a very good relation at all levels in the company, at the operational level and also at the top. We have discussed already. I have discussed with Mario and the idea is to cooperate and collaborate in the plan for 2022. What is the plan? We are just starting technical discussion. Clearly, it's a lot we can add on that technical discussion.
It's not new for the country, neither for you guys that as operators today we rank in between the most efficient operation of the basin. Therefore of course we have things to add. The way that is structured the JV, of course, we have a say on the program for 2022. We together will have to agree what exactly is that program that we are going to implement. We are on that discussion. I don't think yet we have a clear program for next year.
Thank you.
The other question was.
Our next question.
Sorry. Sorry, Guilherme. I mean, you have another question or not? Because I thought that I answered that.
Thank you. Our next question comes from the line of Andres Cardona from Citigroup. Your line is now open.
Yes, good morning. Miguel, Alejandro, congratulations for the results. Most of my questions have been asked, but I still have two. Miguel, if maybe you can comment about the cost of pad number nine. Also, if you have some visibility about realization prices for the fourth quarter, if you have keep your strategy of selling in advance, because it has been very good guidance, over the last couple of quarters. That would be from my side. Again, congratulations on the results.
Thank you, Andrés, for your question. Yes, let me tell you first about pad nine. We complete and tie in pad nine in September, okay. We land teo wells in La Cocina and two wells in Orgánico. The average lateral length, if I remember properly, was close to 3,100 meters, and we placed 51 average stages per well. That was, I mean, operationally, we went even farther than we used to go, and also we managed to place in average more stages that we used to do, and that was part of the plan.
We have a sidetrack in one of the wells, so we drill three wells without issues, and we have one well of the pad that due to technical issues, when we were running casing, we would have to sidetrack. Basically, what we did is we recover the casing and then basically we run again, we cement, and we sidetrack it. This operation, the effect for the quarter that you basically did was pushing 20 to 25 days our production. What is today of the pad, around 3,000 barrel per day, and it's not fully clean, so still cleaning up. It was pushed 25 days from September to October. Also, we have in that particular well an overrun cost.
All those wells today we are drilling on a normalized basis around $10 million. In this well, we have a $4 million additional. That was the full impact of the sidetrack of one well in the complete pad. Okay. Nothing. I mean, we have drilled already 10 pads. The performance have been exceptional. Of course, we investigate, we do, we prove, and so on. It's part of running an operation. No major impact, very slight impact in what we do. And the pad for what I'm seeing from the production today, choke is looking good, around well type. That is your first question.
Your second question was related to our look on prices for Q4. As I mentioned in the call, in Q4, we have already locked 100% of our revenues. We managed in Q4 to place two cargos, that means 30% of our total volume. In October, one to Total, basically that was with prices. What we have in October was Brent prices around $73. We managed to have realized prices around $66. In December, we sold another cargo to an off-taker. Brent at that time was around $83, and we managed to realize prices of $76. Domestic volume were placed to basically Trafigura, YPF and others.
that is what we have already locked in for Q4. you, when you look at the whole thing, you should expect that our average sales prices will be around $60 per barrel for the basket. Hope I answered your question, Andres.
You did. Thanks a lot.
Thank you. Our next question comes from the line of Ezequiel Fernández from Balanz. Your line is now open.
Hi. Good morning. This is Ezequiel Fernández from Balanz. Thank you for taking the time to do the call and all the complete material as always. I have three questions. I would like to go one by one, if you don't mind. The first one is relating to pricing. It has two parts. Going back a little bit to what Andrés Cardona was just asking, we had some news articles in Argentina recently talking about the internal price of crude going for $60 per barrel at the moment. I don't know if you can confirm that, and if that is for the lighter oil such as the one Vista sell. And also, what was the discount versus Brent on your export sales during the third quarter?
Well, thank you very much for your question, Ezequiel. Simply, related to your first questions on the $60 per barrel in the local market. The reality is we have not seen those prices in the local market. We will probably seen prices more today around $55. If anybody's getting $60, my congratulations to them. I think we should go to those numbers. As you know, I mean, the local number depend mainly of many things, but one is the price of the pan and the negotiation with the refineries. So we have not seen prices of $60, so blindly.
Second, in terms of the export, it's exactly what I said previously, okay? You see, discounts of around 10% in export. You can basically place probably $1.4 to $1.5 of the $10 that you will see today to quality. Okay? Depends on the tender, we see a range, and we've been very successful. Not long ago that price was around $5, okay? We today are talking about $1.5 to $2. The other part is the export side of the export tax. That, I mean, is today around another $8. So that is the discount that we are getting in export. It's very straightforward.
The only variance is the quality. The quality of Vaca Muerta and the recognition of the quality of Vaca Muerta is a super positive story. I mean, no difficulties when we got to export. Again, back to the previous question. The key for us, the key for the industry, the key for Argentina is to create more volumes, to invest more, in order to have more volumes going to the export. This is a win-win situation for everybody.
Great. Thank you. My second question is related to income taxes. Given your investment pace during the past years, Vista has not been paying income taxes up to now, if I'm not mistaken. I wanted to get a sense if you are budgeting or thinking that you're gonna start paying some next year.
Yes, Ezequiel, that's correct. You can see in the balance of Vista, in our statement, that everything that we call current taxes is basically what we are forecasting we should pay during the next year.
Okay, great. My final question, and this might be a little bit early to ask, tell me if it's so. If you could comment a little bit of your lower carbon and ESG initiatives for next year.
Yeah. Well, thank you for answering that. I think we present a bit of that in the presentation. We basically are reducing around 100,000 tons of CO2 equivalent on an annualized basis. This is what we are doing in 2021. For next year, we expect a further reduction. On December ninth, in our Investor Day strategy, we will present exactly what we will do. We are super excited about the plan that we have. Our forward plans, our CapEx assigned to that. I think in terms of becoming a low carbon operator, we are already low cost, a low carbon operator. I think we are reserving for December ninth the news to present there.
If you excuse me, I will let me hold that card in order to give it to everybody during that day, that is going to be an important day for us.
That's perfect. That's all from my side. Thank you very much.
Thank you very much, Ezequiel.
Thank you. Our next question comes from the line of Konstantinos Papalias from Puente. Your line is now-
Thank you very much. Good morning, and congratulations on your results. This has clearly been quite a fruitful call. I have two quick questions for you. The first one is a follow-up regarding dividends. Just to make sure, how are you planning on paying dividends if this is a decision reached by the shareholders meeting? Is there a need for authorization from the Argentine Central Bank to actually distribute dividends? My second question is regarding net leverage for the next year or so. What could you expect in terms of net leverage for 2022 or 2023? Does it make a difference if you decide to accelerate production growth? If so, are you considering accessing the international market to obtain funds to boost your strategic plan? Once again, thank you very much.
Yeah, thank you, Konstantinos, for your question. Again, I mean, we are tied down that we for sure will cover in December nine with a full activity. Now, back to what we discussed before. I mean, the positive thing is that we are creating consistently a positive cash flow from the operation. Back to what I said before, our first priority, because it's our story, is to continue growing and we are planning to continue growing, and we will present that plan in detail, again in December 9. We will continue growing and double-digit rates. Back to your second question, when you look at our de-leveraging from the point of view of net debt versus EBITDA, we've been coming down.
We are landing in one this year, what is a super number. I believe you will see a further reduction in 2022. Now, besides that, we are planning to use part of the cash to deleverage our absolute number of debt. Okay? So you should expect that part of the cash will have that use. Of course, there's a caveat there. I mean, for everything that we do with cash, it's our FX restrictions. That is something that we don't have control, okay? It's something also that can change from one year to another in Argentina, and we will adapt to that. The third element of cash is distribution. We think in total shareholder returns, okay? That is how we think.
That distribution is not necessarily dividend. It could be dividend, but also could be share buybacks, okay? Whatever makes more sense to our shareholders and basically whatever makes more sense to Vista. Okay? We are not talking all dividend. We are talking that the portion of the cash is going to be distributed as a total shareholder return.
Very clear. Thank you.
Hope I answered your question.
Thank you very much.
Yeah.
Thank you. At this time, I am showing no further questions. I would like to turn the call back over to Miguel Galuccio for closing remarks.
Well, thank you very much, gentlemen and ladies. Another great quarter for us. I just thank you for the support and for continuing to be beside us. Looking forward to see you on December ninth at our Investor Day, where we will give you an update on the strategy of Vista going forward. Thank you very much. Have a good day.
This concludes today's conference call. Thank you for participating. You may now disconnect.