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4Q 2018 and FY 2018 Earnings – Laredo Petroleum Inc.

Laredo Petroleum Inc. · Feb 13, 2019 · 24 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. 4Q 2018 and FY 2018 Earnings – Laredo Petroleum Inc. – slide 1
    Fourth-Quarter & Full-Year 2018 Earnings Presentation
  2. 4Q 2018 and FY 2018 Earnings – Laredo Petroleum Inc. – slide 2
    FY-18 Highlights 17% BOE YoY production growth 19% Proved reserves YoY value increase to 2.1 B 13% Organic proved developed reserves YoY volume growth 14% Cash margin per BOE increase YoY1 1.6x million Net debt to…
  3. 4Q 2018 and FY 2018 Earnings – Laredo Petroleum Inc. – slide 3
    History of Consistent Production Growth Historic Production 26 24 22 Total Production1 (MMBOE) 20 18 16 14 12 10 8 6 4 2 0 2011 2012 2013 2014 2015 2016 2017 2018 Oil NGL Natural Gas 17% YoY growth in FY-18 total…
  4. 4Q 2018 and FY 2018 Earnings – Laredo Petroleum Inc. – slide 4
    Organically Grew Total Proved Reserves In 2018 YE-18 Total Proved Reserves Reserves By Category 300 PUD Total Proved Reserves (MMBOE) 9% 250 1 2 238 216 44 200 (25) PDP 150 91% 100 50 Reserves By Product 0 Oil 26%…
  5. 4Q 2018 and FY 2018 Earnings – Laredo Petroleum Inc. – slide 5
    Revised Type Curve Expected to Yield Similar Returns as Previous Revised Versus Previous Type Curve: Cumulative Production Cumulative Production 600 (MBO & MBOE) 400 200 0 0 12 24 36 48 60 Months Revised 1.3 MMBOE Type…
  6. 4Q 2018 and FY 2018 Earnings – Laredo Petroleum Inc. – slide 6
    YE-18 Total PDP Reserves 5-Year Decline Exit-Rate Net Total Base Production 80 Net Total Base Production 70 60 (MBOE/d) 50 40 30 20 10 0 YE-18 YE-19 YE-20 YE-21 YE-22 YE-23 Year 1 Year 2 Year 3 Year 4 Year 5…
  7. 4Q 2018 and FY 2018 Earnings – Laredo Petroleum Inc. – slide 7
    YE-18 Oil PDP Reserves 5-Year Decline Exit-Rate Net Oil Base Production 35 Net Oil Base Production 30 25 (MBO/d) 20 15 10 5 0 YE-18 YE-19 YE-20 YE-21 YE-22 YE-23 Year 1 Year 2 Year 3 Year 4 Year 5 Decline Rate -44%…
  8. 4Q 2018 and FY 2018 Earnings – Laredo Petroleum Inc. – slide 8
    Revised Type Curve Improves Productivity Versus Tighter Wells Tightly-Spaced Development Cumulative Oil Production Results & Expectations Versus Type Curve 300 Production (MBO) Cumulative Oil 200 100 0 0 1 2 3 4 5 Years…
  9. 4Q 2018 and FY 2018 Earnings – Laredo Petroleum Inc. – slide 9
    Development Strategy Focused on Wider Spacing Wells per DSU Formation Development Zone NAV/ ROR/ Tight Spacing Wide Spacing UW-AB UWC UW-CD 12 - 16 4-8 Wells Wells UWE-MWA MW-B MWC MW-C 12 - 16 4-8 Wells Wells MW-D LW-AB…
  10. 4Q 2018 and FY 2018 Earnings – Laredo Petroleum Inc. – slide 10
    Transitional Year With a Commitment to Cash Flow Neutrality Expected 1Q-19 2Q-19 3Q-19 4Q-19 Activity Continuous 3 rigs 2 rigs 1 rig 1 rig Drilling Activity 28 gross well Strategic shift of Completions 2.0 crews 1.5 crews 0…
  11. 4Q 2018 and FY 2018 Earnings – Laredo Petroleum Inc. – slide 11
    2019 Capital Program Demonstrates Flexibility & Discipline 2019 Capital Program 400 365 350 65 YoY production expectations: 300 9% total production growth Capital ( MM) 250 5% oil decline 200 Completing 34 net wells 150…
  12. 4Q 2018 and FY 2018 Earnings – Laredo Petroleum Inc. – slide 12
    History of Improving Drilling Efficiencies Gross Drilled Lateral Feet Per Rig 250,000 225,000 Gross Drilled Lateral Feet per Rig 200,000 175,000 150,000 125,000 100,000 75,000 50,000 25,000 0 2014 2015 2016 2017 2018…
  13. 4Q 2018 and FY 2018 Earnings – Laredo Petroleum Inc. – slide 13
    Substantial Reduction in Controllable Cash Costs 14 12 LOE & Cash G&A (/BOE) 10 8 6 4 2 0 1Q-15 2Q-15 3Q-15 4Q-15 1Q-16 2Q-16 3Q-16 4Q-16 1Q-17 2Q-17 3Q-17 4Q-17 1Q-18 2Q-18 3Q-18 4Q-18 LOE (/BOE) Cash G&A (/BOE)…
  14. 4Q 2018 and FY 2018 Earnings – Laredo Petroleum Inc. – slide 14
    Prior Infrastructure Investments Helping to Reduce Operating Costs Pipeline Infrastructure 60 miles crude gathering 110 miles water gathering/recycled distribution 180 miles natural gas gathering & distribution 220,000 truckloads…
  15. 4Q 2018 and FY 2018 Earnings – Laredo Petroleum Inc. – slide 15
    Redefined Development Strategy Translates to Increased Value Development Strategy wider-spacing development + measured growth Reduced Increased Improved future Cash flow ROR vs. long-term oil decline neutrality tighter-spaced…
  16. 4Q 2018 and FY 2018 Earnings – Laredo Petroleum Inc. – slide 16
    APPENDIX 17
  17. 4Q 2018 and FY 2018 Earnings – Laredo Petroleum Inc. – slide 17
    1Q-19 Guidance 1Q-19E Production (MBOE/d).... 74.0 Crude oil production (MBbl/d).............................. 27.5 Price Realizations (pre-hedge): Crude oil (% of WTI)..... 90% Natural gas liquids (% of WTI)......... 24% Natural…
  18. 4Q 2018 and FY 2018 Earnings – Laredo Petroleum Inc. – slide 18
    Maintaining A Strong Balance Sheet 1.6x net debt to Adjusted EBITDA1 Debt Maturity Summary 600 500 1 B of available liquidity2 Debt ( MM) L +1.25% 400 5.625% 300 6.250% 200 100 0 2019 2020 2021 2022 2023 800 MM…
  19. 4Q 2018 and FY 2018 Earnings – Laredo Petroleum Inc. – slide 19
    Significant Benefits Through Water Infrastructure Investments Water Infrastructure LPI leasehold Water storage 110 miles of water gathering & distribution Water treatment facility Water lines Water corridor benefits pipelines…
  20. 4Q 2018 and FY 2018 Earnings – Laredo Petroleum Inc. – slide 20
    Consistent Financial Hedging Program 20,000 18,000 16,000 14,000 Volumes (MBOE) 12,000 10,000 8,000 6,000 4,000 2,000 0 Commodity Basis Commodity Basis Commodity Basis 2019 2020 2021 5.625% 6.250% NGL Natural Gas…
  21. 4Q 2018 and FY 2018 Earnings – Laredo Petroleum Inc. – slide 21
    Oil, Natural Gas & Natural Gas Liquids Hedges Hedge Product Summary FY-19 FY-20 FY-21 Oil total floor volume (Bbl) 8,687,000 2,196,000 912,500 Oil wtd-avg floor price (/Bbl) 47.91 47.27 45.00 Oil total floor volume w. deferred…
  22. 4Q 2018 and FY 2018 Earnings – Laredo Petroleum Inc. – slide 22
    Hedge Settlement Details Other than the oil basis swaps, the Company's oil derivatives are settled based on the month's arithmetic average of the daily settlement prices for the NYMEX index price for the first nearby month of the West…
  23. 4Q 2018 and FY 2018 Earnings – Laredo Petroleum Inc. – slide 23
    Supplemental Non-GAAP Financial Measure Adjusted EBITDA Adjusted EBITDA is a non-GAAP financial measure that we define as net income or loss plus adjustments for depletion, depreciation and amortization, non-cash stock-based…
  24. 4Q 2018 and FY 2018 Earnings – Laredo Petroleum Inc. – slide 24
    Cash Margin Per BOE 2018 2017 (/BOE)1 Average sales price without derivatives2 32.50 29.22 Minus: Lease operating expenses 3.67 3.53 Production and ad valorem taxes 1.99 1.78 Transportation and marketing expenses 0.47 ---…

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