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Fourth Quarter and Full Year 2019 – Laredo Petroleum Inc.

Laredo Petroleum Inc. · Feb 12, 2020 · 26 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. Fourth Quarter and Full Year 2019 – Laredo Petroleum Inc. – slide 1
    L A R E D O P E T R O L E U M Fourth-Quarter & Full-Year 2019 Earnings Presentation
  2. Fourth Quarter and Full Year 2019 – Laredo Petroleum Inc. – slide 2
    Surpassing Guidance on Production & Expenses 4Q-19 Select Results Oil Production Lease Operating Expense Controllable Cash Costs Production 27.3 MBO/d 2.84/BOE 5% beat vs guidance 11% beat vs guidance Total Production G&A…
  3. Fourth Quarter and Full Year 2019 – Laredo Petroleum Inc. – slide 3
    Successful Transition to Returns-Focused Strategy in 2019 FREE CASH FLOW1 Generated 60 MM in 2019 OIL PRODUCTION Above guidance for four consecutive quarters 2019 Management PROVED RESERVES transition Oil growth of 27% YoY &…
  4. Fourth Quarter and Full Year 2019 – Laredo Petroleum Inc. – slide 4
    Pivoted Strategy to Increase Stakeholder Value Target consistent Free Cash Flow1 generation and oil growth per net debt-adjusted share Continuous In Process Opportunistic Improve corporate Increase scale Optimize existing returns…
  5. Fourth Quarter and Full Year 2019 – Laredo Petroleum Inc. – slide 5
    Disciplined Acquisition Strategy, Committed to a Strong Balance Sheet Target consistent Free Cash Flow1 generation and oil growth per net debt-adjusted share High-margin, higher-return (50+% oil) inventory Contiguous Midland Basin…
  6. Fourth Quarter and Full Year 2019 – Laredo Petroleum Inc. – slide 6
    Laredos Recent Acquisitions at Discount to Precedent Trades Focused on employing a disciplined approach to acquisition economic evaluation 80,000 Glasscock County 65 MM Purchase Price 70,000 4,475 net acres 45 gross locations…
  7. Fourth Quarter and Full Year 2019 – Laredo Petroleum Inc. – slide 7
    Demonstrated Discipline Preserves Competitive Leverage Debt Maturity Summary 700 2.2x 600 Debt ( MM) Net Debt to 600 500 Adj. EBITDA1 400 400 300 200 275 100 0 2020 2021 0 2022 0 2023 2024 2025 2026 2027 2028 275 MM…
  8. Fourth Quarter and Full Year 2019 – Laredo Petroleum Inc. – slide 8
    Hedging Strategy Reduces Impact of Commodity Price Fluctuations WTI (/Bbl) Brent (/Bbl) HH (/MMBtu) Waha Basis (/MMBtu) 3.50 0.00 65 65 63.07 59.50 (0.50) 60 60 3.00 2.72 (0.76) 54.92 (1.00) 55 55 50.91 2.50 50 50 (1.50) 2.04…
  9. Fourth Quarter and Full Year 2019 – Laredo Petroleum Inc. – slide 9
    Wider-Spaced Packages Support Consistent Oil Outperformance 2019 Cumulative Oil Performance by Package 140 Exceeding Type Curve by 12% Production (MBO) 120 Cumulative Oil 100 80 60 40 20 0 0 30 60 90 120 150 180 210 240…
  10. Fourth Quarter and Full Year 2019 – Laredo Petroleum Inc. – slide 10
    Operational Efficiencies Drive Peer-Leading Capital Costs Drilling & Completions Continue to Excel 1,600 Record Performance Accelerated Production in 2019 1,400 Feet per Day 1,200 1,000 800 600 400 200 0 1Q-17 2Q-17 3Q-17…
  11. Fourth Quarter and Full Year 2019 – Laredo Petroleum Inc. – slide 11
    Acquisitions Add Oily, High-Margin Inventory Total Inventory (Acquired + Established) Inventory Inventory Years 655 - 825 12.5 Acquired Inventory Lower Spraberry/UWC/MWC Inventory Inventory Years 175 3 Established Inventory…
  12. Fourth Quarter and Full Year 2019 – Laredo Petroleum Inc. – slide 12
    Acquisitions Support Oil Growth & Free Cash Flow1 Generation 4 Cash Flow at 50/BO WTI ( MM) Cumulative Undiscounted 2 0 -2 -4 -6 -8 0 5 10 15 20 25 30 35 40 45 50 55 60 Months LPI UWC/MWC Oil Type Curve LPI Regional…
  13. Fourth Quarter and Full Year 2019 – Laredo Petroleum Inc. – slide 13
    Successfully Transitioning to Howard County Operations transition is currently under way: Two of four drilling rigs in Howard County, with third expected in Mar-20 First well of 15-well package has been drilled, completions…
  14. Fourth Quarter and Full Year 2019 – Laredo Petroleum Inc. – slide 14
    Prioritizing the Environment in Our Operations LPI Recycled Water for Completions 4,000 50% Recycled Water (MBbl) 3,500 Completions Water 40% 3,000 % of Total 2,500 30% 2,000 1,500 20% 1,000 10% 500 0 0% 1Q-17…
  15. Fourth Quarter and Full Year 2019 – Laredo Petroleum Inc. – slide 15
    Infrastructure Protects the Environment & Enhances Economics LPI In-Place Infrastructure 60 Miles 54 MBWPD Crude oil gathering pipelines Produced water recycling capacity 110 Miles 170 miles Water gathering & distribution Natural…
  16. Fourth Quarter and Full Year 2019 – Laredo Petroleum Inc. – slide 16
    L A R E D O P E T R O L E U M APPENDIX
  17. Fourth Quarter and Full Year 2019 – Laredo Petroleum Inc. – slide 17
    1Q-20 Guidance Production: Total production (MBOE/d) 81.2 - 82.7 Oil production (MBbl/d) 26.8 - 27.3 Average sales price realizations: (excluding derivatives) Oil (% of WTI) 100% NGL (% of WTI) 14% Natural gas (% of Henry Hub)…
  18. Fourth Quarter and Full Year 2019 – Laredo Petroleum Inc. – slide 18
    Oil, Natural Gas & Natural Gas Liquids Hedges Hedge Product Summary FY-20 FY-21 Oil total volume (Bbl) 9,552,600 1,460,000 Oil wtd-avg price (/Bbl) - WTI 59.50 Oil wtd-avg price (/Bbl) - Brent 63.07 60.16 Nat gas total volume…
  19. Fourth Quarter and Full Year 2019 – Laredo Petroleum Inc. – slide 19
    23% YoY Total Proved Reserves Growth in 2019 Consistent Reserves Growth 400 24% CAGR 2015 - 2019 Total Proved Reserves (MMBOE) 300 50 21 200 25 26 25 244 100 217 191 141 100 0 YE-15 YE-16 YE-17 YE-18 YE-19 PD…
  20. Fourth Quarter and Full Year 2019 – Laredo Petroleum Inc. – slide 20
    YE-19 Base Production Decline Expectations 100 Total Production Decline 80 86.5 MBOE/d 60 60.8 40 49.8 42.4 37.1 33.2 20 0 Dec-19 Dec-20 Dec-21 Dec-22 Dec-23 Dec-24 30 Oil Production Decline 25 27.5 20 MBO/d…
  21. Fourth Quarter and Full Year 2019 – Laredo Petroleum Inc. – slide 21
    Howard County Tier-One Acquisitions Deliver Higher-Margin Production Acquisition prices are well below historic Howard County averages, with potential for additional bolt-on acquisitions Current Howard County Acquisitions 1 2 Net…
  22. Fourth Quarter and Full Year 2019 – Laredo Petroleum Inc. – slide 22
    Bolt-On Glasscock County Acquisition Adds High-Return Inventory Current W. Glasscock County Acquisition Net Total Purchase Price ( MM) 65 Net Acres 4,475 Net Production, BOE/d (% oil) 1,400 (55%) Gross Locations 45 Net Locations…
  23. Fourth Quarter and Full Year 2019 – Laredo Petroleum Inc. – slide 23
    Oil Value Enhanced Via Gulf Coast Access Gross Physical Transportation Contracts: Medallion firm transportation secured for all crude oil produced within dedication area 10 MBOPD firm transportation on Bridgetex through 1Q-22, with…
  24. Fourth Quarter and Full Year 2019 – Laredo Petroleum Inc. – slide 24
    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 income taxes, depletion, depreciation and amortization, impairment expense,…
  25. Fourth Quarter and Full Year 2019 – Laredo Petroleum Inc. – slide 25
    Supplemental Financial Calculations Net debt to TTM Adjusted EBITDA Net Debt to TTM Adjusted EBITDA is calculated as net debt divided by trailing twelve-month Adjusted EBITDA. Net debt is calculated as the face value of debt, reduced by…
  26. Fourth Quarter and Full Year 2019 – Laredo Petroleum Inc. – slide 26
    Free Cash Flow Free Cash Flow is a non-GAAP financial measure that does not represent funds available for future discretionary use because those funds are required for future debt service, capital expenditures, working capital, income…

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