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Scotia Howard Weil 45th Annual Energy Conference – Laredo Petroleum Inc.

Laredo Petroleum Inc. · Mar 27, 2017 · 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. Scotia Howard Weil 45th Annual Energy Conference – Laredo Petroleum Inc. – slide 1
    Scotia Howard Weil 45th Annual Energy Conference March 27, 2017
  2. Scotia Howard Weil 45th Annual Energy Conference – Laredo Petroleum Inc. – slide 2
    Exceptional Performance in 2016 Grew production 11% and funded drilling program with operating cash flow Increased proved developed reserves organically by 40% at a PD F&D cost of 5.12 per BOE Reduced LOE 37% during 2016 with…
  3. Scotia Howard Weil 45th Annual Energy Conference – Laredo Petroleum Inc. – slide 3
    Prior Investments Creating Value Multi-zone, contiguous acreage position enabling capital efficiencies Pushing lateral lengths to 15,000 Multivariate Earth Model drives above type curve production 50 well sample with optimized…
  4. Scotia Howard Weil 45th Annual Energy Conference – Laredo Petroleum Inc. – slide 4
    Capitalizing on Contiguous Acreage Position 141,303 gross/124,654 net acres1 The company has identified 2,000 locations that support lateral lengths of 10,000+ feet on its contiguous acreage Proven development of multiple targeted…
  5. Scotia Howard Weil 45th Annual Energy Conference – Laredo Petroleum Inc. – slide 5
    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…
  6. Scotia Howard Weil 45th Annual Energy Conference – Laredo Petroleum Inc. – slide 6
    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 22 87 37 77 73 226 52 51 LPI Peers1 Contiguous acreage…
  7. Scotia Howard Weil 45th Annual Energy Conference – Laredo Petroleum Inc. – slide 7
    Economic Benefits of Longer Laterals Proved Developed Finding & Development Costs 12 9.70 10 PD F&D (/BOE) 8 7.56 6.26 6 4 2 0 3x - 5,000' wells 2x - 7,500' wells 1x - 15,000' well Rate of Return (%) 60% 50% Rate…
  8. Scotia Howard Weil 45th Annual Energy Conference – Laredo Petroleum Inc. – slide 8
    Drilling Efficiencies Drive Lower Well Costs 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 Thousands of Lateral Feet Drilled per Rig per Year…
  9. Scotia Howard Weil 45th Annual Energy Conference – Laredo Petroleum Inc. – slide 9
    Drilling & Completions Efficiencies Drive Savings 10 10,000 D&C Capital Savings 1 9 1,800 lb/ft D&C Capital Per Well ( MM) 8 Cost-efficient development: Longer laterals 7 Multi-well packages 6 Zipper fracing High-spec…
  10. Scotia Howard Weil 45th Annual Energy Conference – Laredo Petroleum Inc. – slide 10
    Creating Value with the Multivariate Earth Model Actions Results Predicted Well Role of Interference Technology & Performance Optimized Completions Ranked Zones Integration Analysis Optimized Well Spacing Ranked Wells Frac…
  11. Scotia Howard Weil 45th Annual Energy Conference – Laredo Petroleum Inc. – slide 11
    Evolving Beyond the Earth Model 2015 2016 2017 Aerial Coverage Resolution Project duration 12 - 18 months 6 - 12 months 2 - 4 weeks LPI acreage coverage 50% 80% 100% & offset acreage zones 2 4 5 Focus Seismic inversion…
  12. Scotia Howard Weil 45th Annual Energy Conference – Laredo Petroleum Inc. – slide 12
    Earth Model and Optimized Completions Benefits 50 wells utilizing the Earth Model and optimized completions have performed at an average of 136% of 1.3 MMBOE Type Curve1 350 36% Uplift vs 1.3 MMBOE 300 Type Curve through Earth…
  13. Scotia Howard Weil 45th Annual Energy Conference – Laredo Petroleum Inc. – slide 13
    Multivariate Earth Model Enhancing Production Upper Wolfcamp Middle Wolfcamp 350 350 Cumulative Production (MBOE) Cumulative Production (MBOE) 300 300 250 250 1.3 MMBOE 1.3 MMBOE 200 200 150 150 100 100 50 34 wells avg.…
  14. Scotia Howard Weil 45th Annual Energy Conference – Laredo Petroleum Inc. – slide 14
    Latest Optimizations Tests Significantly Exceeding Type Curve 200 Outperformance of 35% is 180 expected to increase as the impacts of managed pressure Average Cumulative Production (MBOE) 160 35% Uplift vs 1.3 drawdown diminish…
  15. Scotia Howard Weil 45th Annual Energy Conference – Laredo Petroleum Inc. – slide 15
    Multivariate Earth Model Driving Meaningful Uplift in Returns 200% 45 WTI 55 WTI 65 WTI 180% 160% 10,000 Lateral Rate of Return (%) 140% 120% 100% 80% 60% 40% 20% 0% UWC MWC Cline UWC MWC Cline UWC MWC Cline…
  16. Scotia Howard Weil 45th Annual Energy Conference – Laredo Petroleum Inc. – slide 16
    Anticipate 2017 Production Growth of 15% 2016 drilling program generated an average return on invested capital of 40% 1 Production numbers prior to 2014 have been converted to 3-stream using an 18% uplift. 2014 results have been…
  17. Scotia Howard Weil 45th Annual Energy Conference – Laredo Petroleum Inc. – slide 17
    Prior Investment in Infrastructure Providing Tangible Benefits 24 MM total benefits for FY-161 5.5 MM total realized benefits from infield infrastructure in 4Q-161 195 horizontal wells served by production corridors with potential…
  18. Scotia Howard Weil 45th Annual Energy Conference – Laredo Petroleum Inc. – slide 18
    Production Corridor Investments Yielding Substantial Financial Benefits 1.3 MM benefit over life of each 10,000 corridor well, with 25% of the benefit received in the first six months1 Water Oil Gas 2016 Benefits 2017…
  19. Scotia Howard Weil 45th Annual Energy Conference – Laredo Petroleum Inc. – slide 19
    Significant Benefits through Water Infrastructure Investments Water infrastructure consists of: 78 miles of total water gathering pipelines Recycling plant capable of processing 30,000 BWPD Linked water storage assets with 5 MMBW…
  20. Scotia Howard Weil 45th Annual Energy Conference – Laredo Petroleum Inc. – slide 20
    Water Infrastructure Capital and LOE Savings 11.3 MMBW (61%) of total 2016 produced water was gathered on pipe Expected to increase to 75% in 2017 6.3 MMBW (34%) of total 2016 produced water was recycled by LMS Expected to increase…
  21. Scotia Howard Weil 45th Annual Energy Conference – Laredo Petroleum Inc. – slide 21
    LMS Crude Gathering System Benefits 44 miles of crude oil gathering lines 7.4 MMBO (64%) of gross operated production in 2016 was gathered on pipe Eliminated 41,000 truckloads of oil in 2016 Reduces time from production to sales…
  22. Scotia Howard Weil 45th Annual Energy Conference – Laredo Petroleum Inc. – slide 22
    Infrastructure Drives Unit LOE Reduction 8 7 LOE (/BOE) 6 5 4 3 1Q-15 2Q-15 3Q-15 4Q-15 1Q-16 2Q-16 3Q-16 4Q-16 Production corridors benefited LOE by 0.51/BOE in 4Q-16 23
  23. Scotia Howard Weil 45th Annual Energy Conference – Laredo Petroleum Inc. – slide 23
    Medallion-Midland Basin System Medallion - Midland Basin System1 YE-15 YE-16 Throughput (MBOPD) 67.6 134.3 Miles of Pipeline 460 6501,2 System Deliverability 125 550 (MBOPD) of AMI or Firm 1.8 MM 2.0 MM Commitment Acres of…
  24. Scotia Howard Weil 45th Annual Energy Conference – Laredo Petroleum Inc. – slide 24
    Medallion-Midland Basin System Pipeline Capacity Majority of system is large-diameter pipe to multiple delivery points 16-inch line to Midland delivery point with 200,000 BOPD capacity 12-inch line to Colorado City delivery point…
  25. Scotia Howard Weil 45th Annual Energy Conference – Laredo Petroleum Inc. – slide 25
    Medallion-Midland Basin: The Premier Pipeline in the Permian Current Oil Production per Square Mile (Bbl/d) Medallions Delivered Volumes 160 0 200 400 600 800 1,000 1,200+ 0.54/Bbl EBITDA net to LPI in 4Q-161 140 Volumes (MBOPD)…
  26. Scotia Howard Weil 45th Annual Energy Conference – Laredo Petroleum Inc. – slide 26
    Maintaining Strong Financial Position Historical Oil Price and Net Debt to Adjusted EBITDA 75 6.0 Net Debt to TTM Adj. EBITDA Proactively maintaining leverage ratio despite a 33% drop in WTI prices from 4Q-14 to 4Q-16 5.0 WTI…
  27. Scotia Howard Weil 45th Annual Energy Conference – Laredo Petroleum Inc. – slide 27
    Disciplined Hedging Program 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 retaining…
  28. Scotia Howard Weil 45th Annual Energy Conference – Laredo Petroleum Inc. – slide 28
    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…
  29. Scotia Howard Weil 45th Annual Energy Conference – Laredo Petroleum Inc. – slide 29
    Prior Strategic Investments Yield Repeatable Benefits Multi-zone, contiguous acreage position enabling development efficiencies Data powering the multivariate Earth Model Production corridors lowering operating costs…
  30. Scotia Howard Weil 45th Annual Energy Conference – Laredo Petroleum Inc. – slide 30
    2017 Guidance 1Q-17 2Q-17 Production (MBOE/d)... 52 - 54 55 - 58 Product % of total production: Crude oil.. 44% - 46% 45% - 47% Natural gas liquids...... 27% - 28% * Natural gas.... 27% - 28% * Price Realizations (pre-hedge):…
  31. Scotia Howard Weil 45th Annual Energy Conference – Laredo Petroleum Inc. – slide 31
    2017 Budget Expectations 2017 Capital Budget 1 530 MM 2017 Drilling & Completions 450 MM Operating 4 Hz rigs 80 MM Drilling and completing 70 Hz wells 85% targeting the UWC & MWC 95% average working interest Hz wells average…
  32. Scotia Howard Weil 45th Annual Energy Conference – Laredo Petroleum Inc. – slide 32
    New UWC & MWC 1.3 MMBOE Cumulative Production Type Curve 1.3 MMBOE Cumulative Production Type Curve 600 Cumulative Production (MBOE) 500 400 1.3 MMBOE 300 200 100 0 12 Months 24 Months 36 Months 48 Months 60 Months…
  33. Scotia Howard Weil 45th Annual Energy Conference – Laredo Petroleum Inc. – slide 33
    YE-16 Proved Reserves Reserves 200 24.9 0.5 Total Proved Reserves (MMBOE) 167.1 34.1 (18.1) PUD 150 16% 125.7 100 PDP 84% 50 0 YE 2015 Revisions1 Additions Acquisition Production YE 2016 Grew proved developed…
  34. Scotia Howard Weil 45th Annual Energy Conference – Laredo Petroleum Inc. – slide 34
    Oil, Natural Gas & Natural Gas Liquids Hedges OIL1 2017 2018 Puts: Hedged volume (Bbls) 1,049,375 1,779,375 Weighted average price (/Bbl) 60.00 55.90 Swaps: Hedged volume (Bbls) 2,007,500 1,095,000 Weighted average price (/Bbl)…
  35. Scotia Howard Weil 45th Annual Energy Conference – Laredo Petroleum Inc. – slide 35
    Hydraulic Fracture Test Site (HFTS) 23.1 MM high-profile, joint-industry project led In-Progress by Laredo and the Gas Technology Institute (GTI) Key Initiatives Complete Slant Well Fracture & Proppant Analysis Laredos Project…
  36. Scotia Howard Weil 45th Annual Energy Conference – Laredo Petroleum Inc. – slide 36
    2015 & 2016 YTD Actuals 1Q-15 2Q-15 3Q-15 4Q-15 FY-15 1Q-16 2Q-16 3Q-16 4Q-16 FY-16 Production (3-Stream) Production MBOE 4,274 4,234 4,124 3,714 16,346 4,204 4,338 4,718 4,889 18,149 BOE/D 47,487 46,532 44,820 40,368 44,782…
  37. Scotia Howard Weil 45th Annual Energy Conference – Laredo Petroleum Inc. – slide 37
    2014 Two-Stream to Three-Stream Conversions 1Q-14 2Q-14 3Q-14 4Q-14 FY-14 Production (2-Stream) MBOE 2,434 2,607 3,033 3,655 11,729 Production BOE/D 27,041 28,653 32,970 39,722 32,134 % oil 58% 58% 59% 60% 59% Production…
  38. Scotia Howard Weil 45th Annual Energy Conference – Laredo Petroleum Inc. – slide 38
    EBITDA Reconciliation LPI Adjusted EBITDA 4Q-16 FY 2016 (in thousands) Net income (18,421) (260,739) Plus: Depletion, depreciation and amortization 37,526 148,339 Impairment expense - 162,027 Non-cash stock-based compensation, net…

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