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JP Morgan Energy Conference – Laredo Petroleum Inc.

Laredo Petroleum Inc. · Jun 28, 2016 · 38 slides

Investor presentation from the Shale Experts oil & gas presentation and slide database. Every page is imaged and its text indexed for search across operators, plays, basins and time.

Slides

  1. JP Morgan Energy Conference – Laredo Petroleum Inc. – slide 1
    JP Morgan Energy Conference June 28, 2016
  2. JP Morgan Energy Conference – Laredo Petroleum Inc. – slide 2
    Capitalizing on Contiguous Acreage Position Contiguous acreage position with 4,500 gross feet of prospective zones enables: 80% of acreage supporting 10,000 laterals Centralized infrastructure in multiple production corridors…
  3. JP Morgan Energy Conference – Laredo Petroleum Inc. – slide 3
    Near-Term Inventory Selection Process Near-term inventory selection criteria employed: 1. High working interest 2. Long laterals 3. Best Hz horizons from multiple zones 4. Earth Model technical analysis 5. Infrastructure investment…
  4. JP Morgan Energy Conference – Laredo Petroleum Inc. – slide 4
    Not All Locations Are Created Equal Individual Well NPV-10 7 Continuous effort to focus on quality 6 locations, not quantity, to create 5 shareholder value 2.3 NPV-10 ( MM) 4 3 1.9 6.2 2 0.2 0.6 1 1.2 0 7,500'…
  5. JP Morgan Energy Conference – Laredo Petroleum Inc. – slide 5
    A Continuous Focus on Key Drivers That Impact Well Returns Acreage Position Improved well performance Earth Model Optimized Completions Infrastructure Improved efficiencies Infrastructure Focus of Capital Drilling Operating…
  6. JP Morgan Energy Conference – Laredo Petroleum Inc. – slide 6
    Prior Investments Driving Results Earth Model and optimized completions yielded 1Q-16 average well results of 30% higher than type curve 10,000 UWC and MWC drilling and completions costs have decreased an additional 600,000 since…
  7. JP Morgan Energy Conference – Laredo Petroleum Inc. – slide 7
    Financial Impact of Operations Results Production 1Q-16 results: 9% higher than midpoint of guidance 2Q-16 updated guidance: 6% increase to midpoint of prior guidance Drilling results support annual production growth YoY at 3 Hz rig…
  8. JP Morgan Energy Conference – Laredo Petroleum Inc. – slide 8
    Peer-Leading Per Unit LOE 1Q-15 12 1Q-16 12 11 11 10 10 Peer Average 9 9 LOE (/BOE) LOE (/BOE) 8 8 7 7 Peer Average 6 6 5 5 4 4 LPI Peers Laredo outpaced peer groups LOE reduction by 16% since 1Q-15 1…
  9. JP Morgan Energy Conference – Laredo Petroleum Inc. – slide 9
    Top-Quartile 1Q-16 Hedged Cash Margin 30 Laredos cash margins 25 preserved through proactive cost and risk management Hedged Cash Margin (/BOE) 20 initiatives Peer Average 15 10 5 0 LPI Peers1 1 Peers are CPE,…
  10. JP Morgan Energy Conference – Laredo Petroleum Inc. – slide 10
    Creating Value with Data, Experience and Technology Actions Results Predicted Well Role of Interference Technology & Performance Optimized Completions Ranked Zones Integration Analysis Optimized Well Spacing Ranked Wells…
  11. JP Morgan Energy Conference – Laredo Petroleum Inc. – slide 11
    Continually Developing & Improving Technical Data Sets Comprehensive core-to-log-to- seismic calibration 3,600 feet of core 589 petrophysical wells 131 dipole sonic logs 1,133 square miles of 3D seismic 47 wells with…
  12. JP Morgan Energy Conference – Laredo Petroleum Inc. – slide 12
    Enhancing Completions with the Earth Model and More Sand Objective of the Earth Model is to facilitate the landing and steering of Standard the wellbore and optimize the Wellbore completion to maximize oil production Completions…
  13. JP Morgan Energy Conference – Laredo Petroleum Inc. – slide 13
    Log-Based Landing-Point Selection: Standard Wellbore A B C D Standard Wellbore Landing Point Significance A Clay content B Original oil in-place C Stress D Brittleness Landing Point 1 Simplified Dipole Log Display…
  14. JP Morgan Energy Conference – Laredo Petroleum Inc. – slide 14
    Earth Model-Based Wellbore Landing A B C D E Earth Model Wellbore Landing Point Significance A Clay content B Original oil in-place C Stress D Brittleness E Natural fracturing E Geomechanical attributes Simplified…
  15. JP Morgan Energy Conference – Laredo Petroleum Inc. – slide 15
    Optimized Landing Point and Completions Highgrades EUR LP-1 LP-2 LP-3 Primary Target: LP-3 LP-4 Scaled 90-Day Cum. Landing Point Oil Prediction % of Type Curve LP-1 56,146 111% Earth Model extraction drives LP-2…
  16. JP Morgan Energy Conference – Laredo Petroleum Inc. – slide 16
    Right Attribute Combination Improves Well Planning Assessing productive area around wellbore Optimized trajectory to target best landing point Extensive frac modeling to optimize completions Extensive frac modeling based on…
  17. JP Morgan Energy Conference – Laredo Petroleum Inc. – slide 17
    Lookback Shows Earth Model is Superior to Standard Wellbore 250% 90-Day Cumulative Oil 225% 200% Predicted % of Type Curve 175% 150% 125% 100% 75% 50% 25% 0% 0% 25% 50% 75% 100% 125% 150% 175% 200% 225% 250%…
  18. JP Morgan Energy Conference – Laredo Petroleum Inc. – slide 18
    Earth Model and Optimized Completions Benefits 1,600 32 +32% vs Oil Type Curve 1,400 through Earth Model 28 Cumulative Oil Production (MBO) 10 - 20% Uplift from and optimized Optimized Completions3 1,200 completions 10 - 20%…
  19. JP Morgan Energy Conference – Laredo Petroleum Inc. – slide 19
    Earth Model & Completion Optimization Results UWC MWC Cum. Production (MBOE) Cum. Production (MBOE) 250 250 200 200 150 1.1 MMBOE 150 Type Curve 1.0 MMBOE 100 100 Type Curve 50 (11 Wells Avg. 1,595 /ft Sand) 50 (9 Wells…
  20. JP Morgan Energy Conference – Laredo Petroleum Inc. – slide 20
    Integration of Earth Model and Optimized Completions Creating differentiated value through seamless integration Reservoir Characterization & Earth Model Optimized Depletion Pattern Lateral Placement Completions Pressure…
  21. JP Morgan Energy Conference – Laredo Petroleum Inc. – slide 21
    Optimized Completions: Proppant Placement & Complexity Increased proppant loading (/ft) Promoting fracture complexity 1,100 1,400 1,800 2,400 Cluster spacing 90 54 30 Optimized proppant placement Diversion techniques Hybrid designs…
  22. JP Morgan Energy Conference – Laredo Petroleum Inc. – slide 22
    Drilling & Completions Efficiencies Total Drilling Efficiency Average Drilling Days 1,000 30 Rig Accept to Rig Release (Ft/Day) Average Drilling Days Rig Accept to 900 25 800 Average Feet Drilled Rig Release (Days) 700…
  23. JP Morgan Energy Conference – Laredo Petroleum Inc. – slide 23
    Decreasing D&C Costs 1 D&C Capital Savings 9 7,500 Lateral 8.2 10,000 Lateral 8 7.0 1.4 7 6.9 D&C Capital Per Well ( MM) 1.1 6.1 1.0 6.3 6 0.9 0.8 5.4 5 0.8 4 6.8 3 5.9 5.9 5.3 5.4 4.6 2 1 0 2 2 YE-15 FY-16E…
  24. JP Morgan Energy Conference – Laredo Petroleum Inc. – slide 24
    Infrastructure Lowers Capital & Operational Costs Infrastructure includes crude gathering/transportation, water gathering, distribution & recycle, natural gas gathering, and centralized gas lift compression 775 wells served by…
  25. JP Morgan Energy Conference – Laredo Petroleum Inc. – slide 25
    Corridor Financial Benefits 1Q-16 Benefits 2016 Benefits LMS Service Actual ( MM) Estimated ( MM)1 LPI Financial Benefits Increased revenues Crude Gathering 2.2 10.3 & 3rd-party income Centralized Gas Lift 0.2 0.9 LOE savings…
  26. JP Morgan Energy Conference – Laredo Petroleum Inc. – slide 26
    Corridors Provide Operating Cost Reductions 140 8 7.58 120 6.90 120 7 108 6.09 Total Net LOE ( MM) Per Unit LOE (/BOE) 6 5.83 100 97 4.88 5 80 4 60 3 40 2 20 1 0 0 FY-14 FY-15 FY-16E 1Q-15 2Q-15 3Q-15 4Q-15…
  27. JP Morgan Energy Conference – Laredo Petroleum Inc. – slide 27
    Medallion-Midland Basin: The Premier Pipeline in the Permian 500 miles with 290,000 net acres dedicated to system 0.49/Bbl 2Q-16E cash flow margin net to LPI YE-16 estimated exit rate of 140,000 - 150,000 Bbl/d 2 MM acres…
  28. JP Morgan Energy Conference – Laredo Petroleum Inc. – slide 28
    Medallion-Midland Basin Crude Oil System Medallions Delivered Volumes 120 100 Volumes (MBOPD) 80 60 40 20 0 1Q-15 2Q-15 3Q-15 4Q-15 1Q-16 2Q-16E Laredo 3rd party Truck offloading Delivery point Throughput on the…
  29. JP Morgan Energy Conference – Laredo Petroleum Inc. – slide 29
    Strong Financial Position 745 million of liquidity1 No term debt due until 2022 950 million of notes callable at Laredos option in 2017 Peer-leading, multi-year hedge position Debt Maturity Summary 1,000 800 5.625% Debt (…
  30. JP Morgan Energy Conference – Laredo Petroleum Inc. – slide 30
    Peer-Leading Multi-Year Hedge Position 100% 100% 67.48 80% 80% % Natural Gas Hedged 3.00 2.65 % Oil Hedged 60% 60% 60.00 2.50 40% 40% 20% 55.98 20% 0% 0% 2Q-16 - 4Q-16 FY-17 FY-18 2Q-16 - 4Q-16 FY-17 FY-18…
  31. JP Morgan Energy Conference – Laredo Petroleum Inc. – slide 31
    Capitalizing on Proven Results: 2016 Capital Program 420 MM Budget 35 Operating 3 Hz Rigs 27 Now maintaining 3 rigs throughout year 13 Expected average completed lateral length of 9,800 345 Drilling 45 - 49 Hz Development…
  32. JP Morgan Energy Conference – Laredo Petroleum Inc. – slide 32
    Rig Cadence Drives Oil Percentage Number of Gross Hz Completions per Quarter vs. % Oil Production 30 70% Number of Gross Hz Completions per Quarter 60% 20 % Oil Production 50% 46% 10 40% 0 30% 1Q-14 2Q-14 3Q-14…
  33. JP Morgan Energy Conference – Laredo Petroleum Inc. – slide 33
    Upper Wolfcamp Type Curves 10,000 Lateral 1,000 EUR: 1,110 MBOE (45% oil) BOE/D 100 180-day cumulative: 118 MBOE (61% oil) 365-day cumulative: 187 MBOE (58% oil) 10 Months Normalized production1 Type curve 1,000…
  34. JP Morgan Energy Conference – Laredo Petroleum Inc. – slide 34
    Middle Wolfcamp Type Curves 10,000 Lateral 1,000 EUR: 1,000 MBOE (51% oil) BOE/D 100 180-day cumulative: 104 MBOE (62% oil) 365-day cumulative: 165 MBOE (59% oil) 10 Normalized production1 Months Type curve 1,000…
  35. JP Morgan Energy Conference – Laredo Petroleum Inc. – slide 35
    Oil & Natural Gas Hedges Open Positions as of June 21, 2016 2Q-16 - 4Q-16 2017 2018 Total OIL1 Puts: Hedged volume (Bbls) 1,572,000 1,049,375 1,049,375 3,670,750 Weighted average price (/Bbl) 43.09 60.00 60.00 52.76 Swaps: Hedged…
  36. JP Morgan Energy Conference – Laredo Petroleum Inc. – slide 36
    Second-Quarter 2016 Guidance 2Q-2016 Production (MMBOE).... 4.1 - 4.3 Product % of total production: Crude oil... 45% - 47% Natural gas liquids.... 26% - 27% Natural gas.. 27% - 28% Price Realizations (pre-hedge): Crude oil (%…
  37. JP Morgan Energy Conference – Laredo Petroleum Inc. – slide 37
    2015 & 2016 (YTD) Actuals 1Q-15 2Q-15 3Q-15 4Q-15 FY-15 1Q-16 Production Production (3-Stream) BOE/D 47,487 46,532 44,820 40,368 44,782 46,202 % oil 51% 46% 45% 45% 47% 48% Realized Pricing 3-Stream Prices Gas (/Mcf) 2.14…
  38. JP Morgan Energy Conference – Laredo Petroleum Inc. – slide 38
    2014 Two-Stream to Three-Stream Conversions 1Q-14 2Q-14 3Q-14 4Q-14 FY-14 Production (2-Stream) BOE/D 27,041 28,653 32,970 39,722 32,134 Production % oil 58% 58% 59% 60% 59% Production (3-Stream) BOE/D 32,358 33,829 38,798…

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