Ladies and gentlemen, thank you for standing by, and welcome to Vista Energy second quarter 2020 earnings and webcast. 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. If you require any further assistance, please press star and zero. Now, I would like to turn the conference over to Alejandro Cherñacov, Strategic Planning and Investor Relations Officer.
Thank you. Good morning, everyone. We are happy to welcome you to Vista's second quarter 2020 results call. I am here with Miguel Galuccio, Vista's Chairman and CEO, and Pablo Vera Pinto, Vista's CFO. 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 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 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 Energy, is a [Non-English content] sociedad anónima bursátil de capital variable 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.
Good morning, everyone, and thank you for joining this earning call. Let me kick it off by highlighting that our COVID-19 business continuity plan is still in place, and that we are successfully keeping our team healthy and safe in these unprecedented times. I hope that you and your family are also staying safe. During Q2, the global oil market has suffered record low prices and extremely high volatility, turning it into one of the most challenging quarters I have been through in more than 25 years of my oil and gas experience. Despite the enormous strain, we have managed to deliver positive results, particularly on the cost side, as well as on the preservation of our balance sheet.
As I will show during the presentation, we have made cost savings and tactical moves with respect to storage and export markets that have allowed us to remain cash positive during the quarter. More importantly, we have made structural OpEx and capital cost reductions, which enable us to grow in a lower oil price environment. We are now seeing light at the end of the tunnel, with demand recovery signals and controlled supply leading to Brent level of $40+ earlier than most of us expected, and having stayed there for most part of June and July. On the domestic front, the economy activity of Argentina has been affected by very strict quarantine measures, depressing local crude oil demand. In this context, we shifted our commercial effort to the international market, exporting 70% of our oil during the quarter.
This, added to the fact that today we have no export tax on international prices below $45 per bbl, have a positive impact on our realization prices and allow us to sell our entire Q2 production, including volumes stored during April and May, at very competitive prices above our cash costs. At the end of May, we reopened our Bajada del Palo Oeste wells, which contributed 13,900 BOEs per day during June. This allow us to prove the underlying productivity of our third pad, which had only produced for 20 days before being shut in March. In June, two of the wells of that pad established an all-time basin record for average daily oil production in peak calendar month. This additional production from our Vaca Muerta well boosted total production, which averaged 23,800 BOEs per day in Q2.
At higher realization pricing, it also boosted revenue, which amounted to $51 million for the quarter. The lifting cost in the second quarter was $8.60 per BOE, 13% below Q1 and 30% below Q2 2019, a remarkable achievement of our team in reducing non-essential activities and renegotiating more than 20 field operation contracts. Such cost saving, as well as additional revenue arising from export, helped us to turn around a very challenging quarter and generate $10 million of adjusted EBITDA. This resulted in a positive free cash flow quarter, closing with a cash balance of $221 million. Finally, our net debt stood at $282 million at the end of the quarter. As I will show later, during July, we have refinanced $75 million of 2020 and 2021 debt maturities, which leaves us with an even stronger cash position to resume activity in the coming months.
Our total production for the quarter was 23.8 thousand BOE per day, an annual decrease of 18%, mainly impacted by the shutting of our Bajada del Palo wells as a result of lower crude oil demand during April and May. As demand and prices pick up, we decided to reopen our 12 wells in the last week of May. This led to a production boost as shown in the top right graph, with June production averaging 32.2 thousand BOEs per day, of which 13.9 came from Bajada del Palo Este. Due to the oil-gas mix of our shared wells, our oil production increased by 82%, from 13 thousand bbl per day in May to 23.6 thousand bbl per day in June. Total crude oil and natural gas production for the quarter were 17% and 20% down year-on-year respectively.
Our second quarter revenues totaled $51.2 million, 57% down year-on-year, impacted by lower production and lower realized crude oil and natural gas prices. As international demand recovered more quickly than domestic demand, which is still impacted by the effect of the lockdown restriction on the economy, we shifted our strategy and sold 70% of our crude oil to export markets. This enabled us to offload our entire Q2 production, including the 300,000 bbl we have stored in April, and the reopening of Vaca Muerta production. Crude oil realization price was $26.5 per bbl on average, 56% below Q2 2019. A breakdown of this figure reveals how our realization prices improved during the quarter, from $19.7 per bbl in April to $24.4 in May and $31.1 per bbl in June. This improvement was mainly driven by recovery Brent prices.
Going forward, we are already seeing a second trend, diminishing discount from Medanito crude to Brent. The average discount in Q2 was around $10 per bbl, roughly twice pre-COVID levels, impacted by higher shipping costs and lower demand for crude oil. We now see a more normalized shipping market as demand for floating storage oils and crude oil demand improve. Both are reducing the discount to Brent of Medanito oil. In July, we closed sales at Brent minus around $5 per bbl, and in August, at already Brent minus less than $4 per bbl. Average natural gas prices were down 42% vis-à-vis the second quarter of 2019, mainly due to weak industrial demand. Moving on to slide six, we present one of our major achievements of the quarter. As shown on the first chart, total operating expenses for the quarter were $18.6 million, 43% down year-on-year.
This impressive metric was a result of a specific task force we put together to conduct negotiation with all key contractors to adjust both unique costs as well as activity levels. In particular, we had successful renegotiations of gas compression, production treatment, field maintenance, and logistics contracts. These cost-cutting initiatives have offset lower production, so our OpEx per bbl was $8.6 for the quarter, 30% down year-on-year and 13% down sequentially. Our adjusted EBITDA for the quarter was $10.2 million and our adjusted EBITDA margin was 20%, both impacted by softer revenues. We selected certain key indicators to better explain the recovery dynamic we have been through during the quarter, showing the upturn we experienced starting in the second half of May and consolidated in June. Breaking down revenue by month, we see a solid improvement during the quarter, driven by recovering oil prices.
We maximize the benefits of this recovery by storing production in April, offloading storage in May, and reopening Vaca Muerta production in June. In April, we sold less than $10 million, as most of the production was stored. In May, revenues include the offload of April-stored production, and we started to see more solid prices recovery in June, which drove revenues well above $20 million. In our previous call, I outlined our revised 2020 approach focused on cost-saving, tactical, and cash preservation actions. Three months later, I'm very happy to say that such actions worked out properly and prevented us from what may have been a negative shut-in that we reported, as some of the research analysts rightly estimated. Having managed to generate positive free cash flow during this challenging quarter is the result of an agile organization focused on cost reduction and cash preservation.
Moving to slide nine, our cash during the period increased from $205.3 million- $220.7 million. We have achieved what we set out to do at the start of the market downturn, basically maintaining a solid cash position. Cash flow from operating activities was $26.6 million, a solid growth sequentially. Cash flow from investing activity was $24.9 million, which include payment of CapEx accrued in Q1 2020 prior to us stopping drilling and completion activities. Finally, we had a $13.7 million increase in cash flow from financing activities, mainly from a peso credit line in Argentina. Additionally, in order to preserve cash and add more visibility to our plan, in July, we refinanced $75 million of 2020 and 2021 maturities. $30 million correspond to short-term local bank loans previously due in July 2020, which were rollovered for 12 to 18 months.
$45 million correspond to the term loan with the bank syndicate, under which we have refinanced a $50 million payment due in July 2020 and $30 million payment due in January 2021, in both cases for 18 months, and in all cases, in local currency. This give us better cash flow visibility to restart investment activities in the coming months. We'll now deep dive into our Vaca Muerta project in Bajada del Palo Oeste. As I mentioned in our previous call, we shut in all our wells on March 20 as crude oil demand declined. In light of the improvement market condition, we decided to reopen our wells between May 26 and May 30. The graph on the left show fast production response upon reopening, driven by pressure build-up in the stimulated rock volume during the shut-in period.
This supports our view that Vaca Muerta acts as an efficient in-reservoir short-term storage solution. The bottom left chart shows the details for our third pad, which had only been produced for 20 days prior to being shut in. After reopening, we have been able to confirm understanding well productivity. In June, well number 2061 exceeded 2,100 bbl of oil per day, and well number 2063 exceeded 2,200 bbl of oil per day, both the highest peak oil metric in the calendar month in the history of Vaca Muerta, based on official information disclosed by the Secretary of Energy. Moving on to slide 10, I will now show you our new design for our Vaca Muerta well in Bajada del Palo Este. With our current oil wells drilled in the pads one, two, and three giving consistent results, we have now updated our type curve.
The chart on the left shows the average cumulative production of the three pads normalized to the new well design compared to previous type curve in purple and the new type curve in black, illustrating that oil wells have consistently overperformed our previous type curve. We tested different lateral lengths and frac spacing in the well we have drilled. Now we are incorporating the 60-m frac spacing that has been successfully tested for our new well design. The new type curve EUR is 1.5 million BOE for wells with 2,800-m laterals and 47 frac stages, up from 1.1 million BOE in our previous type curve, which was for 2,500-m laterals and 34 frac stages. The change in our type curve is a major milestone. By reducing the development cost of Vaca Muerta, it ensures solid return even in a lower oil price scenario.
To further drive the successful reduction of the development cost of Vaca Muerta, we continue focusing on drilling and completion cost savings. We have successfully renegotiated drilling and completion contracts, incorporate learning from frac fluid result of our previous well, and capture upside from the domestic oversupplied frac sand market. The result is a drilling and completion cost of $11.7 million for our new well design, 18% below our lowest well cost so far. In the bottom left chart, you can see how development cost is driven down to $8.4 per BOE through the combined effect of increased well productivity and drilling and completion cost savings. This is 29% below our lower development cost so far, when normalized to the previous well design. Optimizing well design is the key to obtain solid return, and should enable profitable growth even in a potentially lower oil price environment in the following years.
Before we move to Q&A, I will summarize our highlights. We have seen an earlier-than-expected recovery in crude oil demand and therefore prices, which has allowed us to reopen all our Vaca Muerta wells and sell our entire Q2 production. We have successfully implemented cost efficiency measures, driven lifting costs down to $8.6 per BOE. This means that the decrease in OpEx has more than offset the decrease in production in a very tough quarter. We expect OpEx level to be around $9 per bbl in 2020. The boost in revenues from our shared oil production, which we managed to sell to export market, thanks to the effort of our commercial team, in addition to our cost cutting program, allow us to generate positive cash flow in the quarter.
After having refinanced $75 million in 2020 and 2021 maturities, and considering our solid cash position, we are looking forward to restarting our drilling and completion activities and return to profitable growth. If the current conditions remain in place, we should be resuming drilling and completion in August, with another four-well pad. Two wells of such a pad will be landed in La Cocina, and another two in the lower Carbonate section of Vaca Muerta. If the latter test positively, we will be able to add well location to our current inventory of over 400 wells. Our new well design for Vaca Muerta wells will lead to a development cost of $8.4 per BOE, and solid return even in a lower price environment. I hope it come across that we have maintained a strong focus on operational and financial performance during the last three months.
As a team, we have devised solid technical solutions to create a viable, growing business, even at lower prices, and a company that is fitted for the future. To conclude the third part of this call, I would like to thank our investors for their continued support and interest in our company. I would also like to thank the entire team at Vista for their hard work and commitment, especially in these very tough and complex times. We will now open this call for Q&A.
Ladies and gentlemen, if you have a question at this time, just press star one on your telephone. If your question has been answered or you wish to remove yourself from the queue, just press the pound key. Again, if you have a question, just press star, then one. Our first question is from Pedro Medeiros with Citigroup. Please go ahead.
Hi, Miguel. Good morning. Thank you so much for the presentation. Congratulations on the results, okay, for you and for the whole Vista team on this tough times. A couple of quick questions. We noticed improvement in lifting costs through the quarter, in part driven by the recovery in volumes. Would you mind to give us that extra color on the trends for lifting costs that you are forecasting for the second half? Should we continue to expect further progress in unit costs? My second question is, it was very positive to see production resuming at that pace in Bajada del Palo. This is the first question, but I know the environment continues to be very fluid in terms of pricing and market conditions, but would you mind commenting on the recurrence of that progress?
Should we expect the wells that were turned back on to continue at that pace in the second half in resuming normal operations? Are you ready to start completing some of the wells that were pre-drilled before? Thank you so much. I apologize if you have addressed some of these questions by the beginning of the presentation, but I was able only to connect in the middle.
Hi, Pedro. Thank you very much for your question. No problem. Starting from the lifting cost, if you recall, just not too long ago, when we start operation, we used to run these fields for the conventional production with $70 per bbl. Our teams have done a super job, lowering the lifting cost. We basically planned this year with the lifting cost around 10. The reality is, we see now probably 2020 finishes around nine. This particular quarter, we have two effects in the OpEx. One, I will say, it was particular for the quarter, that is the drop of the four pulling units that we have. Basically, we stopped it because of the COVID. We are restarting three of that pulling unit. One finished contract, we don't need it anymore. That is a particular drop that is related to the quarter.
There's been a lot of contract that have been renegotiated from gas compression, maintenance, so on and so on. This restructure, of course, is with us and is going to stay with us for long. I will say for the full year, I think you will see lifting costs more around nine than 10. That was the original plan. On the CapEx side and on the activity side, as you know, we have two well, three pads already in line. Our fourth pad before COVID, we have drilled already three wells, two to the carbonate and one to the, you know. We still having one well to drill.
The drilling rig that is going to start in August, is going to take care of finishing that pad from the drilling side and then completing four wells, two to the lower Carbonate and two to La Cocina. The ones that are going to the lower Carbonate, they have an special design for completion because Carbonate is usually where we have seen movements on the formation that create casing deformation. For that, we are using a special technology that is special, that we have used before and U.S. is broadly used, that is a sliding sleeve for probably the first 24 stages. Depend how we see the well, probably we can have some with plug and perf. For the rest, normal completion for the La Cocina ones, high density completion because we are aiming to probably place around 50 stages.
The fifth pad for this year. We are going to drill an additional pad. We start to drill some surface casing and intermediate casing on one of the well of that pad. That pad is at the north. It's very close to La Amarga Chica. That pad is basically outside of the area that we are drilling now, very highly prospective. We believe there we could have very good wells. That is going to be the last pad that we are going to drill this year. In terms of CapEx, you saw a big reduction in costs as well. Of course, in the development costs, part of the decrease in development costs come from the new EUR, this new EUR of 1.5 million bbl.
I want to also tell you that it's still below what is our current performance for 180 days of our second pad. Our second pad today is performing 24% above that new well design or new type curve. Our third pad is still at 180 days, performing 10% above that new well type. Our third pad is performing almost 30% above that new well type. We feel very comfortable with that new well type. In terms of CapEx, again, a structural reduction in cost, new drilling tariff, new tubular tariff, new service tariff, and also big reduction in sand cost. Okay? I think we took advantage of that particular moment to restructure our costs. These new contracts are no short-term contracts, so are going to go all the way to 2021.
We feel that we took advantage of this pandemic and this crisis also, as I said, to create a company that is fitted for the future. I hope I have answered your questions.
You did. Okay. It was very good. Thank you so much, Miguel, once again.
Thank you. Our next question comes from Bruno Montanari with Morgan Stanley. Please go ahead.
Hi, Miguel, Alejandro. Thanks for taking my question. Great news on the type curve. We were looking for that upgrade for a while now, but increase was quite a nice one. I wanted to stay on that topic and ask if we should see this model as really the standard development for the broader play now, and the company, in a way, experimenting less with well size, frac count, et cetera. I'm asking this with the angle of thinking that your drilling and completion costs as well as your production costs could go down even further under a more stable well design into the future. My second question is more about the near-term issues. As you mentioned, you've done a very good job in rolling over some of the near-term debt maturities.
The question is, are you now comfortable with the debt schedule at this point, or is there more work to be done in the coming quarters considering your potential and hopeful resumption of new drilling in the coming months? Thank you very much.
Thank you very much, Bruno, for your question. Yes, starting with the well type, and the new well design. Yes, I think the new well design for what we have done already is a very good optimization of both CapEx and EUR from the NPV point of view. These 2,800 m with basically 60 m frac spacing and 47 stages is close of what today we perceive as the optimum. It's a very good improvement compared what we have before. Also, I would have to say that going forward, we need to take into consideration also geography. You will see that not necessarily all the wells are going to be 2,800 m.
For example, the well that we have completed in La Cocina, in pad four, it's 2,500 m because we're drilling those wells to the north, we basically have the limit of our concession. In those particular wells, in terms of 60 m between stage, we are going to have 50 m between stage, we are going to have 50 stages. We will play and fine-tune on that concept of the well design around, depend also the geography of where that pad particularly is placed. Definitely is very close to the optimum. I don't discard that we have further cost saving in term of CapEx. Scale clearly will play a role. Sand went down probably around 70% since our original plan, we still having plans probably to bring the sand cost further down.
We will continue seeing probably reduction in CapEx. In term of EUR, as I mentioned before, all our pads are performing above our new guidance of 1.5. I cannot also discard that we are going to have further improvement in EUR. At the moment, we feel very comfortable with that. The next question was financing. Definitely the refinancing today leave us for 2020 or 2021 with our plans fully funded. I don't see really except alternatives that could come in 2021, depending where Argentina is and our access to international markets. In 2021, probably we will think of again, doing something local or internationally with some part of our debt.
Today, with the $75 million that we renegotiate, the $45 of the term loan and the $30 from the local banks, we feel very comfortable and in very good position, CapEx-wise, to restart our profitable growth. As I said in the call, the interesting thing, we can restart in a lower oil price environment compared what was our view few years ago. One thing that we didn't address, I think you mentioned, it's also related to the OpEx. Our wells are going to be assisted by gas lift. That is new for the basin, for unconventional operators, we believe that also is the right approach to have a very cost-efficient lifting cost.
The $9 that we are saying as a lifting cost today, with the further growth in production, and as we add more unconventional wells, I believe lifting costs also will continue going down.
Got it. Very clear. Thank you, Miguel.
Thank you. Our next question is from Marcelo Gumiero with Credit Suisse. Please go ahead.
Morning, Miguel, Alejandro. I hope all is well with you and your family. Thank you for taking the question. I would like to ask two questions. First one, we all know Barril Criollo was implemented at the end of May, fixing oil prices and helping maybe with export taxes. I would like to know, how is the strategy of the company looking forward to the second half of this year in regards to balancing exports with local markets? Might profits on a zero tax to exports or as the local market rebounds, you will focus on local markets? Another question, if I may, regarding also CapEx. One of the measures in terms of cash preservation to withstand the crisis was to cut CapEx by some 50%-65%, if I recall it well, in the first quarter results presentation.
I wonder if that measure is still valid and how you see CapEx going forward for the rest of this year. Maybe you already answered that in the previous question. Just to confirm what we should expect in terms of CapEx. Thank you very much.
Hi, Marcelo. Thank you very much for your question. The first one related to Barril Criollo. Yes, Barril Criollo was a very good initiative from the government. This is our view. One thing, first of all, the price at the gas stations was basically retained flat. That was, again, the main driver of the industry to be able to continue working even at the low oil crude prices. The $45 that Barril Criollo have as established crude oil price for the local market, have a relative impact to us because we really term all our production to the international market. In international market, the same decree reduced export tax to zero, when Brent is below $45 per bbl. What has been the case so far. That have allowed us to export most of our production.
Coming to your next question, we today see Q3, with July and August already sold on the international market. September, we will see. I think we're starting to see some local demand, but I don't discard that we are going to also be able to probably sell something to the international market. Q4, we don't know, but we expect that the local demand will increase as the lockdown of the COVID-19 pandemic start to normalize. That is pretty much the situation. In term of CapEx, as you saw, very low CapEx during Q2. As we start in Q3 and Q4, what you have to take into consideration in your model, we see CapEx between $45 million-$50 million per year.
If we continue with the same activity that we think we do in 2021, that is pretty much what you have to take into consideration. If you get CapEx for facilities, it's going to be very low. Okay. Between $45 million and $50 million per bbl.
Okay. Thank you very much, Miguel. Very clear.
Thank you, Marcelo.
Thank you. Our next question comes from Frank McGann with Bank of America. Please go ahead.
Okay. Thank you very much. Just a couple questions, a little bit bigger picture in nature, just in terms of the market itself. I know financing of course is a major issue. Do you see the potential for consolidation or that you could find perhaps some opportunities for yourselves to acquire properties inexpensively that might add to your longer term potential? Then, kind of along the same lines, as you look out in time, how aggressive do you think will be the continued development of Vaca Muerta as we go forward, given a more challenging global environment, in terms of potentially oil prices and certainly international companies willing to risk capital?
Hi, Frank. Thank you for your question. To address the first one in term of consolidation on new opportunities. We are very active, we are very curious, so we are always looking for things. Nevertheless, with the inventory that we have and the quality of the wells that we are seeing, we have plenty in our plate. The resource is super rich, and one thing that Vista have proved is that it's a top-notch operational machine. As far as resource and with this inventory, we're always looking at, it's very difficult to find something that is better what we have, today in Latin, it has been our experience. In term of, how we see Vaca Muerta development in the new context. It's a very good question.
I will say, it will depend a certain stage of how Argentina normalize or does not normalize in terms of market. I think that is going to be important. All the things that are happening today, the renegotiation of the debt and so on, I think will have an effect on how rapidly we, I mean, not we, but Vaca Muerta could grow. We are in a good position. We have a very good plan, we have cash in hand. I think another dynamic that we play, and I'm very connected with the U.S., due to other positions that I have in other companies. I think, looking at U.S., I see U.S. running out of sweet spots of the quality of the ones that we are basically talking today.
Therefore, for me, U.S. is going to have a break-even price that probably is going to be higher than Vaca Muerta and less opportunities in that sense. I believe if we continue in this trend, and we are able to continue reducing CapEx, reducing OpEx, and even we see quality of wells better than the one that we are commenting today, I think Vaca Muerta, from the resource place and from the oil economic place, leave Argentina aside, it will become a very interesting value proposition. Of course, the context always will play a role in attracting new investment. I hope I have answered your questions right.
No, that's great. Thank you very much.
Thank you. Our next question comes from Alejandro Demichelis with Nau Securities.
Good morning. Just a couple of questions from my side, please. The first one is, on your conventional assets, how is it you're seeing the decline rates now? The second question is on the new well paths that you're going to start on the lower Carbonate and also next to La Amarga Chica. You were talking about potentially increasing the well location inventories that you have. Could you give us some kind of indication of how many additional well locations you can see from there if things go, the way you think you can go?
Yes, Alejandro. Thank you very much for your question. Regarding the decline of conventional. Yeah, conventional is part of the focus that we have, and it's our base production that we said. You can see decline there between 5% and 10%, depending on the field, the type of the field, if they have waterflood or not, this is the normal decline rate that we are seeing in conventional. In term of the lower Carbonate, as you know, part of the challenge of Vaca Muerta has always been the thickness. We have different zones, different organic zone, and one zone that we call carbonate, because the lithology, it look more carbonatic in a certain way.
The particular challenge in that zone has been that, in some places, in some geographical areas, we have the challenge that when we frack the carbonates, we see sheer movements that our geologist and geophysicist assign to basically faults that create casing damage. When you have a casing damage, you lose your ability to basically place all the stages that you have to place in a well. For that, we are using a technology that I have used in three projects that I did a long time ago in U.S., and it's a technology also I know very well from my Schlumberger times that's called sliding sleeve. That technology, what it does is that you don't have to go down and perforate, and basically, when you run your production tubing on the lateral stage, you run a special tubular that have sleeves that you can open.
What we are doing is in the carbonate, trying that technology. We are also doing something that is very tactical to manage the pressure. We are going to fracture the well from the organic. We are going to put the organic well tube on production, and then we are going to frack the carbonate wells. Is something from the Kitchen, sorry, and then we are going to frack the carbonate well. That also, we believe, will help us to manage the pressure. It's a test. Today, when you look at the zone that is prospective for us, or more prospective, is the Kitchen and the upper organic. We have around 400 locations just in the area we are drilling today, that is Bajada del Palo Este.
If we really prove that the carbonate is productive by the way we expecting very good productivity, but our completion strategy work. I think we could probably add another 100 locations to our original estimation of 400 locations today. It's very interesting. It's important for us. We are always looking for new things, so it will be an interesting technical challenge for us.
That's great. Thank you. Just to follow up on that, when you're thinking about the carbonates, yeah, do you also think you can achieve this kind of type curve that you're talking about now, the new type curve, I mean?
It will depend on the number of stages that we manage to place. With a sliding sleeve, you are basically limited to the number of stages that you can place. I will say, probably with the last technology top, we can probably place around 24 stages. That type curve is going to be lower. Now, what we are thinking to do is we are going to place 24 with sliding sleeve, and if the well permits, we are going to add few other with plug and perf. If that test proves successful, yes, we probably will go to a well that is a bit lower to the one that we are talking today, but still very economic.
That's fantastic. Thank you very much.
You're welcome.
Thank you. Our next question comes from Ezequiel Fernandez with Balanz. Please go ahead.
Good morning. Thank you for the materials. My first question is related to, at the beginning of the year in Argentina, there was some talk of moving forward with a new hydrocarbons law. I wanted to know if any progress has been made on that side, maybe in talks with the government. The second question is related to the gas market. What are you seeing in terms of prices, maybe for next year? Also about the possibility of seeing any subsidy scheme of around $3.5 per MMBtu.
Okay. Thank you very much for your question. I think that's a big picture question, and I think important for Argentina is where we go energy-wise going forward. I do believe Argentina to recover will require for, on one hand, to ensure energy security, to call it in a certain way. That is not a given for Argentina because we still have the main part of our production coming from conventional with, in certain places, with very high decline percentage. In order for Argentina to be self-sufficient, we need to keep, and Argentina need to incentivize for operators to keep continued drilling. On the other hand, in the new macroeconomic environment after COVID, I think the need to proceed that come from export is going to be fundamental for Argentina economy in all respect.
Therefore, I do believe there's a big incentive for the government to do two things. First of all, to ensure that the local market, that people continue drilling, and they have a competitive local market. Second, promote access to the international market. What happened in the COVID also have proved one thing. It proved for the ones that didn't believe in the Vaca Muerta crude oil, that the Vaca Muerta crude oil, it could be sold in the export market at very good prices. The last discount that we have in our export, it was less than $4 compared with Brent. Clearly, we have proved that there's an international market there, and I think with very low discounts. I believe the government and whoever manage the energy policy have two big opportunities.
One is to ensure that there's energy security for Argentina and keeping competitive the local market with competitive prices. Second, promoting more investment in order to have some gas to export. I do believe in order to create that level of certainty in a country like Argentina, I definitely believe that probably it will have to be an initiative that have the level of law. I know there are discussions about that. I cannot comment further on that. Second question was related to gas. As you know, we are very little exposed to the gas market. We are becoming, as we drill the Vaca Muerta well, a more oily company, with a very small portion of gas. We are basically seeing the gas price today, or we are forecasting gas price around $2.5 per million BTU.
There are initiatives to promote the drilling of gas and to incentivize gas production, there's a plan that is being discussed on the Secretary of Energy at the moment. Of course, that will be a plus for us. Today, we have almost no exposure to gas.
Okay. That was great. All from my side. Thank you very much.
You're very welcome.
Thank you. Next question comes from David Neuhauser with Livermore Partners. Please go ahead.
Hey, good morning, Miguel. An excellent quarter you guys had. Hey, my question was regarding, again, on the macro. How are you viewing the energy market today, and where do you see a sweet spot for you to be able to grow the asset on a go-forward basis? It shows that obviously you see where all the downward pressure, maybe where the limits are in terms of where your breakeven costs are and what the company's ability to do to continue to lower breakeven costs. That was excellent to see in the quarter. Where do you see your sweet spot given where current prices are at today, and what's your outlook in the next few years on a recovery?
Thank you, David, for your question. Very good question, and thank you for your comments on our quarter. I think what we see When we look at today, the long view on the energy market, the good news is almost every single forecast show a very positive increase in oil price in 2021, and even better in 2022. We share that view. We believe the international market will move up. We believe that is important in a country that promotes exports. Therefore, in Argentina, 2021, it will be the trade-off of what is the policy in terms of pricing for the local market. Today, we have a market that is unregulated, but as Argentina have moved back and forth, we know the government play a role in the pricing at the pump indirectly, but it does.
How much we can promote export and how competitive the local price in the market is gonna be. That is where, for me, the international market, that is going to push Argentina upwards. The dynamic of the local market in Argentina, that is still very important because it will consume most of the production. How Argentina does after the pandemic on that sense, in term of energy policy, I think is very important. Nevertheless, saying that, what the important thing that has happened with Vista, in less than two years, we have managed to improve the productivity of our wells and reduce both OpEx and CapEx to a level where today we can say that in 2021, we will continue drilling as strongly we've established drilling now in Q4.
I think we will have a plan that we can execute at the prices that we are today, where you will see probably increases of around production of 30%. Very important increase on EBITDA. Definitely, we have the cash to execute that plan. I would say we have very good visibility at the level of prices that we are today to grow profitable next year, without any issue. Okay. That will give us a very good platform for 2022 and 2023. The question is, in what market we are going to be in 2021, how much upside we will have with the local market or export market, and also how the macroeconomy of Argentina is in order for us to go for an international market financing if you want to build 2022, 2023 forward.
We feel very comfortable at that level of prices to restart 2020 Q3, Q4, and all 2021. That has not been the context. It's the work that internally the team of Vista did in order to put us in this position with the development cost, as I mentioned, and the lifting cost, as I mentioned, that really put the company in a very good position to deal with the low oil price scenario as we are today.
Excellent. Yes. I think any time you see extreme difficulties, I'll say, in any sector, any industry, you really find out who has the strongest teams with the strongest assets and what they're able to do to continue to lower their cost and put themselves in a position to be much more competitive as things improve and normalize. I think you're proving that time and time again, and I think on a go-forward basis, it's gonna continue to be an exciting story to follow. Thank you.
Thank you, David, for your comment, very motivating for the team. Thank you very much.
Thank you. Sir, I'm not showing any further questions in the queue. I would like to turn the call back to Miguel Galuccio for his final remarks.
Well, thank you very much, guys, for your interest, for following Vista, for your comments, reports. I hope so, all of you are safe. Thank you very much, and looking forward to talk to you again next Q quarter. Appreciate. Have a good day.
Thank you, ladies and gentlemen. This concludes today's conference call. Thank you for participating, and you may now disconnect.