Laredo Petroleum Announces Bolt-On Acquisition in Glasscock County
December 09 2019 - 4:35PM
Laredo Petroleum, Inc. (NYSE: LPI) ("Laredo" or "the Company")
today announced that it has closed a bolt-on acquisition of 4,475
contiguous net acres in Glasscock County for $65 million, further
delivering on the Company’s strategy of acquiring properties that
can improve the Company’s capital efficiency and enhance Free Cash
Flow1 generation. The acquisition was funded with the Company's
$1.0 billion senior secured credit facility, resulting in
outstanding borrowings of $245 million at December 6, 2019.
Acquisition Highlights
- Current net production of 1,400 barrels of oil equivalent
("BOE") per day (55% oil)
- Approximately 45 total gross (35 net) expected locations across
the Lower Spraberry, Upper Wolfcamp and Middle Wolfcamp formations
at 1,320' spacing, 80% of acreage held by production ("HBP")
- Located in an area of high oil productivity with relevant
offset wells indicating first year oil production 37% higher than
expectations for legacy Laredo Wolfcamp drilling
"We are excited to announce another acquisition
that delivers on our strategy of shifting our development to
oilier, more capital-efficient acreage," stated Jason Pigott,
President and Chief Executive Officer. "This acquisition expands
our Glasscock County position further to the west into an area of
higher oil productivity than our established acreage position. We
expect to incorporate this acreage into our drilling plan to meet
HBP obligations in 2020 and 2021 and transition to full development
upon completion of the Howard County development plan, extending
our runway of higher-value locations to three years."
"This acquisition enhances our ability to
generate combined high-single digit oil growth and Free Cash Flow1
through 2022," continued Mr. Pigott. "We remain committed to
maintaining a competitive leverage ratio and expect to utilize our
Free Cash Flow to pay down our revolver as we pursue a disciplined,
accretive acquisition strategy."
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 midstream and marketing
services, 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 and any oral statements made
regarding the subject of this release contain 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, indicates, enables,
transforms, estimates or anticipates (and other similar
expressions) will, should or may occur in the future are
forward-looking statements. This press release and any accompanying
disclosures may include or reference certain forward-looking,
non-GAAP financial measures, such as free cash flow, and certain
related estimates regarding future performance, results and
financial position. 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, the increase in
service and supply costs, tariffs on steel, pipeline transportation
constraints in the Permian Basin, hedging activities, possible
impacts of litigation and regulations, the suspension or
discontinuance of share repurchases at any time and other factors,
including those and other risks described in its Annual Report on
Form 10-K for the year ended December 31, 2018, Quarterly Report on
Form 10-Q for the quarter ended September 30, 2019, and those set
forth from time to time in other filings with the Securities and
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.
All amounts, dollars and percentages presented
in this press release are rounded and therefore approximate.
1 Projected Free Cash
FlowProjected Free Cash Flow is calculated as estimated
cash flows from operating activities before changes in assets and
liabilities, less estimated costs incurred, excluding non-budgeted
acquisition costs, made during the period. Management believes this
is useful to management and investors in evaluating the operating
trends in its business due to production, commodity prices,
operating costs and other related factors.
Contacts:Ron Hagood: (918) 858-5504 -
RHagood@laredopetro.com
Laredo Petroleum (NYSE:LPI)
Historical Stock Chart
From Aug 2024 to Sep 2024
Laredo Petroleum (NYSE:LPI)
Historical Stock Chart
From Sep 2023 to Sep 2024