Laredo Petroleum, Inc. (NYSE: LPI) ("Laredo" or the "Company")
announced today that it has closed its previously announced
transactions to acquire the oil-weighted Howard County leasehold of
Sabalo Energy, LLC ("Sabalo"), a portfolio company of EnCap
Investments L.P., and a non-operating partner, and to partially
divest of certain legacy gas-weighted proved developed producing
reserves to an affiliate of Sixth Street Partners, LLC ("Sixth
Street"). Additionally, the Company announced the results of its
"at-the-market" offering program (the "ATM Program"), described in
a prospectus supplement filed with the Securities and Exchange
Commission (the "SEC") on February 23, 2021, and scheduled its
second-quarter 2021 earnings release and conference call.
On July 1, 2021, Laredo closed two previously
announced transformative transactions. For the acquisition of
Sabalo’s assets, after closing price adjustments, the Company paid
the sellers aggregate consideration of $606 million in cash and
2.507 million shares of Laredo’s common stock. For the sale of
proved developed reserves to Sixth Street, Laredo received $405
million in cash, subject to customary adjustments, and may receive
additional potential cash flow based earn-out payments over the
next six years.
Subsequent to the announcement of the
transactions, the Company sold 714,526 shares through its ATM
Program at an average price of $65.70 for net proceeds of $45.8
million. Laredo has 16.1 million total shares outstanding as of
July 1, 2021, including shares issued in connection with the
closing of the Sabalo acquisition.
In connection with the closing of the
transactions, the Company’s senior secured credit facility
borrowing base was reaffirmed at $725 million, with both Laredo’s
elected commitment and lender commitments set at $725 million. As
of July 1, 2021, Laredo has outstanding borrowings of $380 million
on its senior secured credit facility, resulting in available
capacity, after the reduction for outstanding letters of credit, of
$301 million. Including cash and cash equivalents of $54 million,
total liquidity is $355 million.
"The closing of these transformative transactions
marks the transition of Laredo into a very different Company than
it was two years ago," stated Jason Pigott, President and Chief
Executive Officer. "Our disciplined acquisition strategy has
dramatically improved our expected capital efficiency and Free Cash
Flow1 generation capability. We remain committed to reducing
leverage and maintaining our financial strength as we develop our
oil-weighted properties and further transform our asset base."
Second-Quarter 2021 Earnings Release and
Conference Call Details Laredo will report second-quarter
2021 financial and operating results after the market close on
Wednesday, August 4, 2021, and will host a conference call on
Thursday, August 5, 2021, at 7:30 a.m. CT to discuss the results.
To participate on the call, dial 877.930.8286 (international
dial-in 253.336.8309), using conference code 3698069 or listen to
the call via the Company's website at www.laredopetro.com, under
the tab for "Investor Relations." A telephonic replay will be
available approximately two hours after the call on Thursday,
August 5, 2021 through Thursday, August 12, 2021. Participants may
access this replay by dialing 855.859.2056, using conference code
3698069.
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,
primarily in the Permian Basin in West Texas.
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. 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. Such statements are not guarantees of future
performance and involve risks, assumptions and uncertainties.
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 ability of the
Company to execute its strategies, including its ability to
successfully identify and consummate strategic acquisitions at
purchase prices that are accretive to its financial results and to
successfully integrate acquired businesses, assets and properties,
oil production quotas or other actions that might be imposed by the
Organization of Petroleum Exporting Countries and other producing
countries ("OPEC+"), the outbreak of disease, such as the
coronavirus ("COVID-19") pandemic, and any related government
policies and actions, changes in domestic and global production,
supply and demand for commodities, including as a result of the
COVID-19 pandemic and actions by OPEC+, long-term performance of
wells, drilling and operating risks, the increase in service and
supply costs, tariffs on steel, pipeline transportation and storage
constraints in the Permian Basin, production curtailment, hedging
activities, possible impacts of litigation and regulations, the
impact of repurchases, if any, of securities from time to time and
other factors, including those and other risks described in its
Annual Report on Form 10-K for the year ended December 31, 2020,
its Current Report on Form 8-K filed on May 11, 2021 and those set
forth from time to time in other filings with the SEC. These
documents are available 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. Any forward-looking
statement speaks only as of the date on which such statement is
made and the Company undertakes no obligation to correct or update
any forward-looking statement, whether as a result of new
information, future events or otherwise, except as required by
applicable law.
1Free Cash Flow
(Unaudited)
Free Cash Flow is a non-GAAP financial measure
that the Company defines as net cash provided by operating
activities (GAAP) before changes in operating assets and
liabilities, net, less costs incurred, excluding non-budgeted
acquisition costs. Free Cash Flow does not represent funds
available for future discretionary use because it excludes funds
required for future debt service, capital expenditures,
acquisitions, working capital, income taxes, franchise taxes and
other commitments and obligations. However, management believes
Free Cash Flow is useful to management and investors in evaluating
operating trends in its business that are affected by production,
commodity prices, operating costs and other related factors. There
are significant limitations to the use of Free Cash Flow as a
measure of performance, including the lack of comparability due to
the different methods of calculating Free Cash Flow reported by
different companies.
Investor Contact: Ron Hagood
918.858.5504 rhagood@laredopetro.com
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