Laredo Petroleum, Inc. (NYSE: LPI) ("Laredo" or the "Company")
today announced that its board of directors authorized a $200
million share repurchase program. The two-year program is
authorized through May 27, 2024.
Highlights:
- $200 million share repurchase program realizes the Company’s
commitment to begin returning significant cash to shareholders
approximately nine months ahead of schedule
- Debt repayment target updated to ~$700 million by year-end
2023
- On track to achieve targeted Net Debt1/Consolidated EBITDAX1
ratio target of 1.0x by first-quarter 2023
- Free Cash Flow1 for 2022-23 estimated at ~$900 million at
current commodity prices
"Today’s buyback announcement is the continuation
of a three-year effort to create a new Laredo Petroleum," stated
Jason Pigott, President and Chief Executive Officer. "We have
successfully repositioned the Company and are focused on
high-return, disciplined investments in our oil-weighted
developments. We expect to generate approximately $900 million of
Free Cash Flow through the end of next year, enabling us to
continue reducing debt while opportunistically repurchasing our
shares."
The Company may purchase shares in accordance with
applicable securities laws from time to time in open market or
privately negotiated transactions. The Company intends to fund
repurchases from available working capital and cash provided by
operating activities. The timing, number and value of shares
repurchased under the program will be at the discretion of
management and the board of directors and will depend on a number
of factors, including market conditions, business conditions, the
trading price of the Company's common stock and the nature of other
investment opportunities available to the Company. The program does
not obligate Laredo to acquire any particular dollar amount or
number of shares of its common stock, and the share repurchase
program may be suspended from time to time, modified, extended or
discontinued by the Company’s board of directors at any time.
1Non-GAAP financial measure; please see
definitions of non-GAAP financial measures at the end of this
release.
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
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 contents
of this release, including in the conference call referenced
herein, 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, actions by OPEC+ and the Russian-Ukrainian military
conflict, long-term performance of wells, drilling and operating
risks, the increase in service and supply costs, including as a
result of inflationary pressures, tariffs on steel, pipeline
transportation and storage constraints in the Permian Basin, the
possibility of production curtailment, hedging activities, the
impacts of severe weather, including the freezing of wells and
pipelines in the Permian Basin due to cold weather, possible
impacts of litigation and regulations, the impact of the Company's
transactions, if any, with its securities from time to time, the
impact of new laws and regulations, including those regarding the
use of hydraulic fracturing, the impact of new environmental,
health and safety requirements applicable to the Company's business
activities, the possibility of the elimination of federal income
tax deductions for oil and gas exploration and development and
other factors, including those and other risks described in its
Annual Report on Form 10-K for the year ended December 31, 2021 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. Any forward-looking statement speaks only as
of the date on which such statement is made. Laredo does not intend
to, and disclaims any obligation to, correct, update or revise any
forward-looking statement, whether as a result of new information,
future events or otherwise, except as required by applicable
law.
This press release and any accompanying
disclosures include financial measures that are not in accordance
with generally accepted accounting principles ("GAAP"), such as
Consolidated EBITDAX and Free Cash Flow. While management believes
that such measures are useful for investors, they should not be
used as a replacement for financial measures that are in accordance
with GAAP. For a reconciliation of such non-GAAP financial measures
to the nearest comparable measure in accordance with GAAP, please
see the supplemental financial information at the end of this press
release. Unless otherwise specified, references to "average sales
price" refer to average sales price excluding the effects of the
Company's derivative transactions.
All amounts, dollars and percentages presented in
this press release are rounded and therefore approximate.
Free 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 incurred capital expenditures, 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.
Consolidated EBITDAX
(Unaudited)
Consolidated EBITDAX is a non-GAAP financial
measure defined in the Company's Senior Secured Credit Facility as
net income or loss (GAAP) plus adjustments for extraordinary gains
(or losses), non-cash recurring gains (or losses), depletion,
depreciation and amortization expense, interest expense, any
provisions for (or benefit from) income or franchise taxes,
exploration expenses and other non-cash charges. Consolidated
EBITDAX is used by the Company’s management for various purposes,
including as a measure of operating performance and compliance
under the Company's Senior Secured Credit Facility. Additional
information on the calculation of Consolidated EBITDAX can be found
in the Company's Senior Secured Credit Facility, as amended by the
Eighth Amendment thereto, as filed with the SEC on April 19,
2022.
Net Debt (Unaudited)
Net Debt, a non-GAAP financial measure, is
calculated as the face value of long-term debt plus any outstanding
letters of credit, less cash and cash equivalents. Management
believes Net Debt is useful to management and investors in
determining the Company's leverage position since the Company has
the ability, and may decide, to use a portion of its cash and cash
equivalents to reduce debt.
Net Debt to Consolidated EBITDAX
(Unaudited)
Net Debt to Consolidated EBITDAX, a non-GAAP
financial measure, is calculated as Net Debt, including letters of
credit, divided by Consolidated EBITDAX, as defined in the
Company's Senior Secured Credit Facility. For the purposes of
calculating Consolidated EBITDAX for the period ended March 31,
2022, the calculation is the annualization of the three quarters
ended March 31, 2022. Net Debt to Consolidated EBITDAX is used by
the Company’s management for various purposes, including as a
measure of operating performance, in presentations to its board of
directors and as a basis for strategic planning and
forecasting.
Investor Contact: Ron Hagood
918.858.5504 rhagood@laredopetro.com
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