Laredo Petroleum, Inc. (NYSE: LPI) ("Laredo" or the "Company")
today announced that the borrowing base of the Company’s Senior
Secured Credit Facility was reaffirmed at $725 million in
association with the semi-annual redetermination process.
Additionally, the Company announced the purchase of 2,758 net acres
in Howard County, including production of 210 barrels of oil
equivalent ("BOE") per day, for $11.3 million.
Senior Secured Credit Facility Highlights
(cash balance as of Oct. 19, 2020, includes acquisition
payment)
- Reaffirmed borrowing base and maintained elected commitment of
$725 million
- Reduced current borrowings to $220 million, a decrease from
$275 million at June 30, 2020
- Increased liquidity to $476 million, including cash and cash
equivalents of $15 million and adjusted for $44 million in letters
of credit, an increase from $422 million at June 30, 2020
Howard County Bolt-On
Highlights
- Acquired 2,758 net acres adjacent to existing Howard County
acreage, increasing the Company’s position to 11,299 net acres
- Added 12 new 10,000-foot locations at conservative, 12 wells
per unit development assumptions, with the potential for 25
additional locations as drilling units are formed
- Increased the working interest and lateral length of 12
existing locations, from 45% to 83% and from 7,500 feet to 10,000
feet, respectively
- Includes production of 210 BOE per day (80% oil)
- Low-cost financing with entire transaction funded with
borrowings from Senior Secured Credit Facility
"During the third quarter, we delivered on our
commitment to reduce net borrowings and strengthen our balance
sheet, and have now reduced Net Debt by $54 million after paying
for the Howard County bolt-on acquisition," stated Jason Pigott,
President and Chief Executive Officer. "With the reaffirmation of
our borrowing base fortifying our liquidity, hedges in 2021
equivalent to 80% of expected oil production supporting anticipated
cash flows, and no term-debt maturities until 2025, we feel we are
well positioned to execute on our strategic objectives of capital
efficient oil growth and sustained Free Cash Flow generation."
"We have now closed on our third bolt-on
acquisition in Howard County since our initial investment late last
year, adding additional high-margin drilling locations at prices
not seen since the introduction of horizontal drilling in the
Midland Basin," continued Mr. Pigott. "The Company’s strong
financial position and history as a low-cost operator underpin this
strategy as we begin to develop our Howard County asset and remain
focused on executing similar, reasonably-priced bolt-on
acquisitions around our core position in Howard County."
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, 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, 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, the possibility of 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, 2019, its Quarterly Report on Form 10-Q/A for the
quarter ended March 31, 2020, its Quarterly Report on Form 10-Q for
the quarter ended June 30, 2020 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.
All amounts, dollars and percentages presented in
this press release are rounded and therefore approximate.
Free Cash Flow Free Cash Flow, a
non-GAAP financial measure, represents net cash provided by
operating activities before changes in operating assets and
liabilities, net, less costs incurred, excluding non-budgeted
acquisition costs. Management believes Free Cash Flow 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. 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.
Net Debt Net Debt, a non-GAAP
financial measure, is calculated as long-term debt less cash.
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.
Contacts: Ron Hagood: 918.858.5504 -
RHagood@laredopetro.com
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