Laredo Petroleum Increases 2016 Full-Year Capital Budget and Production Guidance
May 10 2016 - 10:08PM
Increases Estimated 2016 Production to
16.1 - 16.4 million BOE
Laredo Petroleum, Inc. (NYSE:LPI) (“Laredo” or the “Company”) today
announced it has updated its 2016 capital budget and estimated
production.
Revised 2016 Capital Budget
Laredo today announced that its Board of Directors has approved
a revised capital budget of $420 million for 2016, excluding
investments in the Medallion Gathering & Processing, LLC
("Medallion-Midland Basin") pipeline system. The budget includes
approximately $345 million for drilling and completions,
approximately $35 million for production facilities and
approximately $40 million for land, seismic and other capitalized
costs.
"The capital efficiency gains we are recognizing from utilizing
our proprietary Earth Model paired with optimized completions and
our increased drilling efficiency are driving rates of return
higher," said Randy A. Foutch, Chairman and Chief Executive
Officer. "Retaining our third drilling rig throughout 2016 grows
production at more than 10% from the fourth quarter of 2015 and, at
the current drilling cadence, sets the Company on a clear growth
trajectory into 2017."
The Company now expects to operate three horizontal rigs for the
entirety of 2016 and anticipates drilling approximately 45 to 49
gross horizontal wells. Laredo's contiguous acreage base enables
the drilling of longer, more capital efficient laterals and the
Company expects approximately 80% of wells drilled to be
10,000-foot laterals, with several being approximately 12,500 feet
or greater.
Laredo expects to utilize the Company's Earth Model combined
with optimized completions on all wells in 2016. Each completion is
individually engineered to maximize the rate of return, using a
combination of more sand, various stage and cluster spacings and
additives to decrease water usage. The drilling and completion
portion of the 2016 budget includes approximately $50 million for
optimized completions and associated testing.
Laredo expects production associated with the revised budget to
be in the range of 16.1 to 16.4 million BOE for 2016, approximately
even with 2015 total production and growing more than 10% from the
fourth quarter 2015 average.
Liquidity
On May 6, 2016, Laredo Midstream Services, LLC agreed to
participate in a Medallion-Midland Basin investment of
approximately $21 million, approximately $15 million of which has
been paid, resulting in an outstanding balance of $230 million
under the Company's senior secured credit facility. Upon the
successful closing of Laredo's previously announced issuance of
common stock, the Company expects to repay borrowings under its
senior secured credit facility.
About Laredo
Laredo Petroleum, Inc. is an independent energy company with
headquarters in Tulsa, Oklahoma. Laredo's business strategy is
focused on the acquisition, exploration and development of oil and
natural gas properties and the transportation of oil and natural
gas from such properties, primarily in the Permian Basin of West
Texas.
Additional information about Laredo may be found on its website
at www.laredopetro.com.
Forward-Looking Statements
This press release contains forward-looking statements as
defined under Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. All statements, other than statements of historical facts,
that address activities that Laredo assumes, plans, expects,
believes, intends, projects, estimates or anticipates (and other
similar expressions) will, should or may occur in the future are
forward-looking statements. The forward-looking statements are
based on management's current belief, based on currently available
information, as to the outcome and timing of future events.
General risks relating to Laredo include, but are not limited
to, the decline in prices of oil, natural gas liquids and natural
gas and the related impact to financial statements as a result of
asset impairments and revisions to reserve estimates, and other
factors, including those and other risks described in its Annual
Report on Form 10-K for the year ended December 31, 2015, and those
set forth from time to time in other filings with the Securities
Exchange Commission (“SEC”). These documents are available through
Laredo’s website at www.laredopetro.com under the tab
“Investor Relations” or through the SEC’s Electronic Data Gathering
and Analysis Retrieval System at www.sec.gov. Any of these factors
could cause Laredo's actual results and plans to differ materially
from those in the forward-looking statements. Therefore, Laredo can
give no assurance that its future results will be as estimated.
Laredo does not intend to, and disclaims any obligation to, update
or revise any forward-looking statement.
Contacts:Ron Hagood: (918) 858-5504 -
RHagood@laredopetro.com
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