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January 2017 Corporate Presentation – Laredo Petroleum Inc.

Laredo Petroleum Inc. · Jan 16, 2017 · 35 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. January 2017 Corporate Presentation – Laredo Petroleum Inc. – slide 1
    Corporate Presentation January 2017
  2. January 2017 Corporate Presentation – Laredo Petroleum Inc. – slide 2
    Led By Experienced Management Team Each member of the senior management team has more than 30 years of energy industry experience Randy Foutch has founded four successful exploration and production companies and operated through a…
  3. January 2017 Corporate Presentation – Laredo Petroleum Inc. – slide 3
    Prior Investments Creating Value Multi-zone, contiguous acreage position enabling development efficiencies In the first nine months of 2016 completed lateral length of 10,000 driving higher rates of return Data powering the…
  4. January 2017 Corporate Presentation – Laredo Petroleum Inc. – slide 4
    FY-17E Budget Expectations 530 MM 2017 Capital Budget 2017 Drilling & Completions 450 Operating 4 Hz rigs 80 1 Drilling and completing 70 Hz wells 85% targeting the UWC & MWC 95% average working interest Hz wells average 10,000…
  5. January 2017 Corporate Presentation – Laredo Petroleum Inc. – slide 5
    Consistent Production Growth Anticipate 2017 production growth of 15% 25,000 20,000 Estimate Production1,2 (MBOE) 4Q 15,000 1Q-3Q 2016 Actual 10,000 5,000 0 2011 2012 2013 2014 2015 2016E 2017E Actual…
  6. January 2017 Corporate Presentation – Laredo Petroleum Inc. – slide 6
    Capitalizing on Contiguous Acreage Position 141,459 gross/124,958 net acres1 Contiguous acreage position with 4,500 gross feet of prospective zones Centralized infrastructure in multiple production corridors and ability to drill…
  7. January 2017 Corporate Presentation – Laredo Petroleum Inc. – slide 7
    Multiple Targeted Horizons Identified Primary targets Hz Wells Drilled Thickness OOIP1 Secondary targets Landing Points Clearfork Upper/Middle Spraberry Lower 4,500 gross ft. of prospective zones Spraberry 2 415 90 2-3…
  8. January 2017 Corporate Presentation – Laredo Petroleum Inc. – slide 8
    Peer-Leading Long-Lateral Execution 14,000 LPI 13,000 12,000 Estimated Lateral Length (Feet) 11,000 10,000 9,000 8,000 7,000 6,000 5,000 4,000 Well Count 13 53 19 46 42 139 19 34 LPI Peers1 Average Lateral…
  9. January 2017 Corporate Presentation – Laredo Petroleum Inc. – slide 9
    Drilling Efficiencies Drive Lower Well Costs LPI Drilled Lateral Footage per Rig per Year 2017E 175 2016 166 2015 125 2014 88 2013 76 0 20 40 60 80 100 120 140 160 180 200 Thousand Lateral Feet Drilled per Rig per Year…
  10. January 2017 Corporate Presentation – Laredo Petroleum Inc. – slide 10
    Drilling & Completion Costs 10,000 D&C Capital Savings 1 10 9 8.2 Efficiency gains partially 8 offset recent increases in D&C Capital Per Well ( MM) 1.4 7 service costs 6.4 6 1.0 5 D&C capital includes: 4 Pad…
  11. January 2017 Corporate Presentation – Laredo Petroleum Inc. – slide 11
    Laredos Technology Workflow Actions Results Predicted Well Role of Interference Technology & Performance Optimized Completions Ranked Zones Integration Analysis Optimized Well Spacing Ranked Wells Frac Modeling Optimized…
  12. January 2017 Corporate Presentation – Laredo Petroleum Inc. – slide 12
    Evolving Beyond the Earth Model Enhanced analysis of key production drivers 2015 2016 2017 12-18 months project duration 6-12 months project duration 2-4 weeks project duration 50% of LPI acreage 80% of LPI acreage 100% of LPI +…
  13. January 2017 Corporate Presentation – Laredo Petroleum Inc. – slide 13
    Hydraulic Fracture Test Site (HFTS) 23 MM high-profile, joint-industry project led by In-Progress Laredo and the Gas Technology Institute (GTI) Key Initiatives Complete Slant Well Fracture & Proppant Analysis Laredos Project…
  14. January 2017 Corporate Presentation – Laredo Petroleum Inc. – slide 14
    Advanced Hydraulic Fracture Data Collected on Laredo Leasehold HFTS GTI LAYOUT (6 UWC wells, 5 MWC wells, UWC & MWC refracs) UWC wells Refrac wells MWC wells Cored Intervals Slant Core Well HYDRAULICALLY FRACTURED CORE…
  15. January 2017 Corporate Presentation – Laredo Petroleum Inc. – slide 15
    Advanced Fracture Modeling Increasing connected propped fractures Hydraulic propped fractures Hydraulic unpropped fractures Utilizing multivariate Earth Model analysis to optimize completions designs 16
  16. January 2017 Corporate Presentation – Laredo Petroleum Inc. – slide 16
    Earth Model and Completion Optimization Benefits Wells utilizing the Earth Model and optimized completions have performed at an average of 139% of Oil Type Curve1 4,500 72 4,000 64 39% uplift vs Oil Type Curve 3,500 through Earth…
  17. January 2017 Corporate Presentation – Laredo Petroleum Inc. – slide 17
    Multivariate Earth Model Enhancing Production Upper Wolfcamp Middle Wolfcamp 350 300 Cumulative Production (MBOE) Cumulative Production (MBOE) 300 250 250 200 200 1.1 MMBOE 150 1.0 MMBOE 150 100 100 28 wells avg. 1,826…
  18. January 2017 Corporate Presentation – Laredo Petroleum Inc. – slide 18
    Latest Optimization Tests Significantly Exceeding Type Curve Initial two wells utilizing the multivariate Earth Model and optimized drilling and completions with 2,400 lb/ft sand are yielding results significantly greater than type…
  19. January 2017 Corporate Presentation – Laredo Petroleum Inc. – slide 19
    Multivariate Earth Model Driving Meaningful Uplift in Returns 160% 45 WTI 55 WTI 65 WTI 140% 120% 100% ROR (%) 80% 60% 40% 20% 0% UWC MWC Cline UWC MWC Cline UWC MWC Cline Laredo type curve ROR Multivariate Earth…
  20. January 2017 Corporate Presentation – Laredo Petroleum Inc. – slide 20
    Prior Investment in Infrastructure Providing Tangible Benefits 6.0 MM total realized benefits in 3Q-161 25 MM total estimated benefits for FY-161 195 horizontal wells served by production corridors with potential for 2,500 more2…
  21. January 2017 Corporate Presentation – Laredo Petroleum Inc. – slide 21
    Corridor Financial Benefits 1.6 MM benefit over life of each 10,000 corridor well, with 25% of the benefit received in the first six months1 Water Oil Gas 3Q-16 Benefits 2016 Benefits LMS Service Actual ( MM) Estimated (…
  22. January 2017 Corporate Presentation – Laredo Petroleum Inc. – slide 22
    Peer-Leading Unit LOE1 3Q-15 9 3Q-16 9 8 8 7 7 Peer Average LOE (/BOE) LOE (/BOE) 6 6 5 5 Peer Average 4 4 3 3 2 2 LPI Peers Production corridor assets reduced unit LOE 0.52/BOE in 3Q-16 1 Peers…
  23. January 2017 Corporate Presentation – Laredo Petroleum Inc. – slide 23
    Medallion-Midland Basin Crude Oil System Medallion - Midland Basin System1 600 miles with 325,000 net acres dedicated to system 2 MM acres either under AMI or supporting firm commitments System Deliverability: Colorado City: 125…
  24. January 2017 Corporate Presentation – Laredo Petroleum Inc. – slide 24
    Medallion-Midland Basin: The Premier Pipeline in the Permian Current Oil Production per Square Mile (Bbl/d) Medallions Delivered Volumes 0 200 400 600 800 1,000 1,200+ 140 0.48/Bbl EBITDA net to LPI in 3Q-16 120 Volumes…
  25. January 2017 Corporate Presentation – Laredo Petroleum Inc. – slide 25
    Strong Financial Position 800 MM of liquidity1 No term debt due until 2022 950 million of notes callable at Laredos option in 2017 Top-tier, multi-year hedge position Debt Maturity Summary 1,000 800 5.625% Debt ( MM) 600…
  26. January 2017 Corporate Presentation – Laredo Petroleum Inc. – slide 26
    Top-Tier, Multi-Year Hedge Position Oil Hedges Natural Gas Hedges 100% 100% 90% 90% 80% 80% Hedging 70% 70% program % Natural Gas Hedged1 provides price % Oil Hedged1 60% 60% 50% 50% protection 40% 40% while…
  27. January 2017 Corporate Presentation – Laredo Petroleum Inc. – slide 27
    Oil Hedges Retain Meaningful Upside in 2017 Estimated Avg. NYMEX Price Received 70 Estimated Avg. Price Received (/Bbl) 65 60 Downside Protection Upside Participation 55 50 45 40 40 45 50 55 60 65 70 NYMEX Price…
  28. January 2017 Corporate Presentation – Laredo Petroleum Inc. – slide 28
    Fourth-Quarter 2016 Guidance 4Q-2016 Production (MMBOE)... 4.7 - 4.9 Product % of total production: Crude oil.. 45% - 47% Natural gas liquids...... 26% - 27% Natural gas.... 27% - 28% Price Realizations (pre-hedge): Crude oil…
  29. January 2017 Corporate Presentation – Laredo Petroleum Inc. – slide 29
    Appendix
  30. January 2017 Corporate Presentation – Laredo Petroleum Inc. – slide 30
    Oil, Natural Gas & Natural Gas Liquids Hedges OIL1 2017 2018 Puts: Hedged volume (Bbls) 1,049,375 1,049,375 Weighted average price (/Bbl) 60.00 60.00 Swaps: Hedged volume (Bbls) 2,007,500 1,095,000 Weighted average price (/Bbl)…
  31. January 2017 Corporate Presentation – Laredo Petroleum Inc. – slide 31
    Upper Wolfcamp Type Curves 1,000 10,000 Lateral 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 7,500…
  32. January 2017 Corporate Presentation – Laredo Petroleum Inc. – slide 32
    Middle Wolfcamp Type Curves 1,000 10,000 Lateral EUR: 1,000 MBOE (51% oil) BOE/D 100 180-day cumulative: 104 MBOE (62% oil) 365-day cumulative: 165 MBOE (59% oil) 10 Months Normalized production1 Type curve 1,000 7,500…
  33. January 2017 Corporate Presentation – Laredo Petroleum Inc. – slide 33
    EBITDA Reconciliation LPI Adjusted EBITDA 3Q-16 (in thousands, unaudited) Net income 9,485 Plus: Depletion, depreciation and amortization 35,158 Non-cash stock-based compensation, net of amounts capitalized 9,651 Accretion of…
  34. January 2017 Corporate Presentation – Laredo Petroleum Inc. – slide 34
    2015 & 2016 YTD-Reported Actuals 1Q-15 2Q-15 3Q-15 4Q-15 FY-15 1Q-16 2Q-16 3Q-16 Production Production (3-Stream) BOE/D 47,487 46,532 44,820 40,368 44,782 46,202 47,667 51,276 % oil 51% 46% 45% 45% 47% 48% 46% 46% Realized…
  35. January 2017 Corporate Presentation – Laredo Petroleum Inc. – slide 35
    2014 Two-Stream to Three-Stream Conversions 1Q-14 2Q-14 3Q-14 4Q-14 FY-14 Production (2-Stream) Production BOE/D 27,041 28,653 32,970 39,722 32,134 % oil 58% 58% 59% 60% 59% Production (3-Stream) BOE/D 32,358 33,829 38,798…

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