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1Q 2020 Earnings Results – Laredo Petroleum Inc.

Laredo Petroleum Inc. · May 6, 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. 1Q 2020 Earnings Results – Laredo Petroleum Inc. – slide 1
    First-Quarter 2020 Earnings Presentation
  2. 1Q 2020 Earnings Results – Laredo Petroleum Inc. – slide 2
    Strategy Increases 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 through…
  3. 1Q 2020 Earnings Results – Laredo Petroleum Inc. – slide 3
    Surpassing Guidance on Production & Expenses 1Q-20 Select Results vs Guidance1 Oil Production Lease Operating Expense Controllable Cash Costs Production 29.2 MBO/d 2.80/BOE 7% beat vs guidance 7% beat vs guidance Total…
  4. 1Q 2020 Earnings Results – Laredo Petroleum Inc. – slide 4
    Significantly Reduced Activity in Response to Oil Price Decline Capital Expectations (MM) 500 40+% reduction 450 1Q-20A 2Q-20E 3Q-20E 4Q-20E FY-20E 450 60 Drilling Rigs 4.0 2.4 1.0 1.0 2.1 400 Spuds 25 17 6 7 55 350 300…
  5. 1Q 2020 Earnings Results – Laredo Petroleum Inc. – slide 5
    Acquisitions Added Oily, High-Margin Inventory 1 Target consistent Free Cash Flow generation and oil growth per net debt-adjusted share High-margin (50+% oil), higher-return inventory Contiguous Midland Basin acreage positioned to…
  6. 1Q 2020 Earnings Results – Laredo Petroleum Inc. – slide 6
    Howard County Position Increases Leverage to Oil Prices Anticipated returns double with a 20% decrease in well costs Forecasted first-year production mix of 80% oil drives exposure to an oil price recovery 40 DUCs at YE-20E sets…
  7. 1Q 2020 Earnings Results – Laredo Petroleum Inc. – slide 7
    Established Cline Inventory Provides Leverage to Natural Gas Prices Cline returns are forecasted to be on par with Howard County when pairing higher natural gas prices with a 15% decrease in well costs 50% 40% ROR1 (%) 30%…
  8. 1Q 2020 Earnings Results – Laredo Petroleum Inc. – slide 8
    Successfully Extended Sr. Unsecured Notes Maturities to 2025 & 2028 Debt Maturities Schedule (Previous vs Current) 700 2.2x Net Debt to 600 Adj. EBITDA1 350 600 Previous Current Debt ( MM) 500 400 450 Previous 400…
  9. 1Q 2020 Earnings Results – Laredo Petroleum Inc. – slide 9
    Strategic Derivatives Protect 2020 & 2021 Cash Flow 1 50 MM of FY-20E Free Cash Flow1 redeployed into FY-21 Brent hedges to strategically manage commodity price risk and cash flow generation in 2021 2020 Net Cash Expected from…
  10. 1Q 2020 Earnings Results – Laredo Petroleum Inc. – slide 10
    Optimized Development Supports Consistent Oil Outperformance Optimized / Wider-Spaced Packages Deliver Oil Outperformance 200 Exceeding Type Curve by 12% Production (MBO) Cumulative Oil 150 100 50 0 0 30 60 90 120 150 180…
  11. 1Q 2020 Earnings Results – Laredo Petroleum Inc. – slide 11
    Operational Efficiencies Drive Lower Capital Costs Drilling & Completions Efficiencies 1,600 Drive Continued Well Cost Reductions 1,400 Feet per Day 1,200 1,000 800 600 400 200 0 1Q-17 2Q-17 3Q-17 4Q-17 1Q-18 2Q-18 3Q-18…
  12. 1Q 2020 Earnings Results – Laredo Petroleum Inc. – slide 12
    Demonstrated Management of Controllable Cash Costs 58% Reduction in LOE/BOE Since 2015 8 LOE (/BOE) 6 6.63 4 4.15 3.53 3.67 2 3.08 2.80 0 2015 2016 2017 2018 2019 1Q-20 Peer-Leading Controllable Cash Costs (/BOE)1 8.31…
  13. 1Q 2020 Earnings Results – Laredo Petroleum Inc. – slide 13
    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…
  14. 1Q 2020 Earnings Results – Laredo Petroleum Inc. – slide 14
    Crude Contracts Maximize Deliverability and Sales Point Performance Long-term firm-transportation contracts secure delivery of oil production to the Gulf Coast Receive WTI-Houston-based and Brent-based pricing through large,…
  15. 1Q 2020 Earnings Results – Laredo Petroleum Inc. – slide 15
    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…
  16. 1Q 2020 Earnings Results – Laredo Petroleum Inc. – slide 16
    L A R E D O P E T R O L E U M APPENDIX
  17. 1Q 2020 Earnings Results – Laredo Petroleum Inc. – slide 17
    Guidance Production: 2Q-20 3Q-20 4Q-20 FY-20 Total production (MBOE/d) 84.8 - 85.8 78.8 - 80.8 72.5 - 74.5 80.6 - 81.9 Oil production (MBO/d) 30.0 - 30.5 24.2 - 25.2 20.5 - 21.5 26.0 - 26.6 Average sales price realizations: 2Q-20…
  18. 1Q 2020 Earnings Results – Laredo Petroleum Inc. – slide 18
    Oil, Natural Gas & Natural Gas Liquids Hedges Hedge Product Summary Bal-20 FY-21 FY-22 Oil total volume (Bbl) 7,177,500 5,602,750 Oil wtd-avg price (/Bbl) - WTI 59.50 Oil wtd-avg price (/Bbl) - Brent 63.07 53.13 Nat gas total volume…
  19. 1Q 2020 Earnings Results – Laredo Petroleum Inc. – slide 19
    Strip Pricing WTI Brent HH (/Bbl) (/Bbl) (/MMBtu) Bal-20 26.85 31.20 2.40 FY-21 33.30 37.15 2.70 20 Note: Utilizing 4-23-20 strip pricing
  20. 1Q 2020 Earnings Results – Laredo Petroleum Inc. – slide 20
    Commodity Prices Used for 2Q-20 Realization Estimates Oil: WTI NYMEX Brent ICE (/Bbl) (/Bbl) Apr-20 16.70 26.69 May-20 20.62 27.22 Jun-20 22.93 28.78 2Q-20 Average 20.09 27.56 Natural Gas Liquids: C2 C3 IC4 NC4 C5+ Composite…
  21. 1Q 2020 Earnings Results – Laredo Petroleum Inc. – slide 21
    23% YoY Total Proved Reserves Growth in 2019 Consistent Reserves Growth 400 Total Proved Reserves (MMBOE) 24% CAGR 2015 - 2019 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…
  22. 1Q 2020 Earnings Results – Laredo Petroleum Inc. – slide 22
    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…
  23. 1Q 2020 Earnings Results – Laredo Petroleum Inc. – slide 23
    Tier-One Howard County Acquisitions Howard County Acquisitions 1 2 Total Purchase Price ( MM) 1301 22.5 155.5 Net Acres 7,360 1,100 8,380 Net Royalty Acres 750 0 750 LPI Leasehold Gross Locations 120 10 130 Howard County Relevant…
  24. 1Q 2020 Earnings Results – Laredo Petroleum Inc. – slide 24
    Bolt-On Glasscock County Acquisition W. Glasscock County Acquisition Total Purchase Price ( MM) 65 Net Acres 4,475 Net Production, BOE/d (% oil) 1,400 (55%) Gross Locations 45 LPI Leasehold Net Locations 36 Glasscock County…
  25. 1Q 2020 Earnings Results – Laredo Petroleum Inc. – slide 25
    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,…
  26. 1Q 2020 Earnings Results – Laredo Petroleum Inc. – slide 26
    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…

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