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February 2020 Investor Presentation – Laredo Petroleum Inc.

Laredo Petroleum Inc. · Feb 26, 2020 · 29 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. February 2020 Investor Presentation – Laredo Petroleum Inc. – slide 1
    February 2020 Corporate Presentation
  2. February 2020 Investor Presentation – Laredo Petroleum Inc. – slide 2
    Pivoted Strategy Transforming Laredo Surpassed Expectations in 2019 Generated 60 MM in Free Cash Flow1 vs initial expectation of Cash Flow1 neutrality Grew oil production 2% YoY vs original expectation of a 5% decrease Acquisitions…
  3. February 2020 Investor Presentation – Laredo Petroleum Inc. – slide 3
    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…
  4. February 2020 Investor Presentation – Laredo Petroleum Inc. – slide 4
    Delivering on Returns-Focused Strategy Mid-single digit annual oil Free Cash Flow1 earmarked 40% oil mix growth expected for for debt repayment anticipated by YE-21 FY-20E - FY-22E 700 NAV/Inventory Focus Targeting Returns/Free…
  5. February 2020 Investor Presentation – Laredo Petroleum Inc. – slide 5
    2020 Capital Budget Expectations Capital Budget ( MM) 1Q-20E 2Q-20E 3Q-20E 4Q-20E FY-20E 500 450 Drilling Rigs 3.9 3.2 2.0 2.0 2.8 450 60 Spuds 26 21 14 13 74 400 % Howard County 50% 100% 100% 100% 82% 350 300 Completion Crews…
  6. February 2020 Investor Presentation – Laredo Petroleum Inc. – slide 6
    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…
  7. February 2020 Investor Presentation – Laredo Petroleum Inc. – slide 7
    Operational Efficiencies Drive Peer-Leading Capital Costs Drilling & Completions Efficiencies 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 4Q-17…
  8. February 2020 Investor Presentation – Laredo Petroleum Inc. – slide 8
    Demonstrated Management of Controllable Cash Costs 8 54% Reduction in LOE/BOE Since 2015 LOE/BOE (/BOE) 6 6.63 4 4.15 3.53 3.67 3.08 2 0 2015 2016 2017 2018 2019 1 Peer-Leading Controllable Cash Costs (/BOE) 7.50 7.48…
  9. February 2020 Investor Presentation – Laredo Petroleum Inc. – slide 9
    Disciplined Acquisition Strategy, Committed to a Strong Balance Sheet 1 Target consistent Free Cash Flow generation and oil growth per net debt-adjusted share High-margin, higher-return (50+% oil) inventory Contiguous Midland Basin…
  10. February 2020 Investor Presentation – Laredo Petroleum Inc. – slide 10
    Laredos Recent Acquisitions at Discount to Precedent Transactions 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…
  11. February 2020 Investor Presentation – 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. February 2020 Investor Presentation – Laredo Petroleum Inc. – slide 12
    Acquisitions Support Oil Growth & Free Cash Flow1 Generation 4 Cash Flow at 50/Bbl 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. February 2020 Investor Presentation – Laredo Petroleum Inc. – slide 13
    Successfully Transitioning to Howard County Operations transition is currently under way: Three of four drilling rigs in Howard County, with fourth expected in Apr-20 First well of 15-well package has been drilled, completions…
  14. February 2020 Investor Presentation – Laredo Petroleum Inc. – slide 14
    LPI Infrastructure Protects the Environment & Enhances Economics Oil & Natural Gas Infrastructure Infrastructure Impact 60 Miles 250,000 Crude oil gathering pipelines Truckloads eliminated from the field 170 miles 2.4 Bcf Natural…
  15. February 2020 Investor Presentation – Laredo Petroleum Inc. – slide 15
    Significant Benefits through Water Infrastructure Investments 110 Miles 54 MBW/d 22.5 MMBW Water gathering & Produced water Owned or contracted distribution pipelines recycling capacity storage capacity LPI Recycled Water for…
  16. February 2020 Investor Presentation – Laredo Petroleum Inc. – slide 16
    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…
  17. February 2020 Investor Presentation – Laredo Petroleum Inc. – slide 17
    Derivatives Position Underpins 2020 Cash Flow1 FY-20E Product Mix FY-20E % Hedged by Product 100% 90% 80% 35% 34% 60% 40% 40% 25% 20% 31% 0% Oil Natural Gas NGL Oil Natural Gas FY-20E Product Revenue Mix NGLs Value of 2020…
  18. February 2020 Investor Presentation – Laredo Petroleum Inc. – slide 18
    L A R E D O P E T R O L E U M APPENDIX
  19. February 2020 Investor Presentation – Laredo Petroleum Inc. – slide 19
    Guidance Production: 1Q-20 FY-20 Total production (MBOE/d) 81.2 - 81.7 85.5 - 87.0 Oil production (MBbl/d) 26.8 - 27.3 29.5 - 30.0 Average sales price realizations: (excluding derivatives) Oil (% of WTI) 100% NGL (% of WTI) 14%…
  20. February 2020 Investor Presentation – Laredo Petroleum Inc. – slide 20
    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…
  21. February 2020 Investor Presentation – Laredo Petroleum Inc. – slide 21
    Budget Pricing WTI (/Bbl) WTI (/Bbl) HH Base Upside (/MMBtu) FY-20 50.00 50.00 2.25 FY-21 50.00 55.00 2.25 FY-22+ 50.00 55.00 2.25 22
  22. February 2020 Investor Presentation – Laredo Petroleum Inc. – slide 22
    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…
  23. February 2020 Investor Presentation – Laredo Petroleum Inc. – slide 23
    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…
  24. February 2020 Investor Presentation – Laredo Petroleum Inc. – slide 24
    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 Total…
  25. February 2020 Investor Presentation – Laredo Petroleum Inc. – slide 25
    Bolt-On Glasscock County Acquisition Adds High-Return Inventory Current W. Glasscock County Acquisition Total Purchase Price ( MM) 65 Net Acres 4,475 Net Production, BOE/d (% oil) 1,400 (55%) Gross Locations 45 Net Locations 36…
  26. February 2020 Investor Presentation – Laredo Petroleum Inc. – slide 26
    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…
  27. February 2020 Investor Presentation – Laredo Petroleum Inc. – slide 27
    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,…
  28. February 2020 Investor Presentation – Laredo Petroleum Inc. – slide 28
    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…
  29. February 2020 Investor Presentation – Laredo Petroleum Inc. – slide 29
    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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