Peter Thiel bets on a unique oil stock that is growing like a technology company
An Argentinian producer is increasing output at a pace almost unknown in the oil sector, and the war in the Strait of Hormuz has given it a second tailwind. But part of this year's growth has a sell-by date, and the market isn't pricing that in yet.
Key points
An oil company with 55% annual revenue growth doubled production in a year when the barrel price was falling.
It costs it $4.5 to produce a barrel, which even American shale drillers could envy.
Peter Thiel invested $76 million in it in August, making it his second-largest position.
Analysts' target is tens of percent above the current market price
Management itself bet $150.7 million on oil being cheap and lost it.
The company built by the former head of Argentina's state giant
Vista Energy $VIST can be described in one sentence: one shale field, one management team and one bet that Argentina will manage to export its oil. That field is Vaca Muerta in Patagonia, a formation with the world's second-largest shale gas reserves and fourth-largest shale oil reserves. That management is the team around Miguel Galuccio, who ran Argentina's state oil giant YPF from 2012 to 2016 and founded Vista in 2017 as a private alternative.
Why have most investors never heard of it? Because almost every detail puts them off: an Argentine company registered in Mexico, traded in New York through depositary shares, no dividend, in an unfashionable sector and with the stigma of a country that has defaulted nine times.
The result: a company with a market cap around $8 billion that roughly doubled revenue this year doesn't even appear on most European investors' screens. That is exactly why it is worth breaking down where that 55% comes from.