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Fourth Quarter 2020 Earnings Presentation – Laredo Petroleum Inc.

Laredo Petroleum Inc. · Feb 22, 2021 · 24 slides

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Slides

  1. Fourth Quarter 2020 Earnings Presentation – Laredo Petroleum Inc. – slide 1
    Fourth-Quarter 2020 Earnings Presentation
  2. Fourth Quarter 2020 Earnings Presentation – Laredo Petroleum Inc. – slide 2
    Successfully Executed Strategy in 2020 Principles Manage Risk Continuously Expand Improve High-Margin Inventory Extended term-debt Reduced volume of Fully transitioned maturities to 2025 and flared/vented gas by 58% development…
  3. Fourth Quarter 2020 Earnings Presentation – Laredo Petroleum Inc. – slide 3
    Inaugural ESG & Climate Change Report: Proven Leadership Laredo has committed to reducing methane emissions and eliminating routine flaring Emissions Reductions Targets for 20251 20% reduction in GHG Zero…
  4. Fourth Quarter 2020 Earnings Presentation – Laredo Petroleum Inc. – slide 4
    Dramatically Exceeded Environmental Targets in 2020 LPI Annual Flare/Vent Data LPI Annual Oil/Water Spill Data Volume decrease 150 Decrease 2,500 58% vs FY-19 29% vs FY-19 Avg. Net Bbls of Total 2,000 Total Flare & Vent…
  5. Fourth Quarter 2020 Earnings Presentation – Laredo Petroleum Inc. – slide 5
    Corporate and Community Responsibility Diversity Safety Governance 0.90 TRIR1 Women in 0.85 0.86 Board refresh workforce 27% 0.80 55% in last 2 years 0.75 0.70 0.74 0.65 2019 2020 Minorities in Laredo had zero at-fault…
  6. Fourth Quarter 2020 Earnings Presentation – Laredo Petroleum Inc. – slide 6
    Howard County Development Driving Reserves Value Total Proved Total Proved PD 11% 24% 36% 278,228 91% 971 MM MBOE PD PV-10 39% 89% Oil Natural Gas NGL PD PUD Howard County Reagan/Glasscock PD Reserves PV-101 2,500 (Henry…
  7. Fourth Quarter 2020 Earnings Presentation – Laredo Petroleum Inc. – slide 7
    2020/2021 Capital Budget & Activity Capital Budget ( MM) 400 351 360 FY-20A FY-21E 30 Spuds 55 53 35 16 30 300 Completions 48 55 200 Working Interest 98.5% 100% 300 300 Lateral Length 9,000 9,800 100 Expect to complete 25%…
  8. Fourth Quarter 2020 Earnings Presentation – Laredo Petroleum Inc. – slide 8
    Howard County Development Achieves Higher Oil Cut 2021 Production Guidance 35 100 Total Production (MBOE/d) Oil Production (MBO/d) 30 80 25 87.8 80.0 - 85.0 60 26.8 27.3 - 29.3 20 15 40 FY-20A FY-21E FY-20A…
  9. Fourth Quarter 2020 Earnings Presentation – Laredo Petroleum Inc. – slide 9
    Passow-Gilbert Package Key to 1Q-21E Oil Production 15-well package fully completed in early December 2020 Package averaged oil production of 10,000 gross BOPD for 26 consecutive days prior to winter storms in Permian Basin All four…
  10. Fourth Quarter 2020 Earnings Presentation – Laredo Petroleum Inc. – slide 10
    Successfully Building Oily, High-Margin Inventory Acquisition goal of 6,000+ net Howard County Total acres per year Net Acres 11,555 Targets LS/UWC/MWC Targeting areas with high (50%+) Locations1 105 - 140 oil cut Focus on…
  11. Fourth Quarter 2020 Earnings Presentation – Laredo Petroleum Inc. – slide 11
    Maintaining Operational & Cost Advantages in Howard County 1,800 Drilling & Completions Efficiencies 1,500 Feet per Day 1,200 900 600 300 0 2017 1Q-17 2Q-17 2018 3Q-17 4Q-17 1Q-18 2Q-18 2019 3Q-18 4Q-18 1Q-19 2Q-19…
  12. Fourth Quarter 2020 Earnings Presentation – Laredo Petroleum Inc. – slide 12
    Cost-Control Focus Improves Margins Demonstrated History of Expense Reduction 12 10.66 10 8 7.60 6.38 (/BOE) 6.07 6 4.65 4 3.84 2 0 FY-15 FY-16 FY-17 FY-18 FY-19 FY-20 Cash G&A Expense1 LOE 13 1Excludes…
  13. Fourth Quarter 2020 Earnings Presentation – Laredo Petroleum Inc. – slide 13
    Howard County Sand Mine Drives Additional D&C Cost Reductions Operated on Laredo-owned surface acreage LPI Leasehold Mining Area 5+ years supply of sand Estimated savings of 90,0001 per well Protects against…
  14. Fourth Quarter 2020 Earnings Presentation – Laredo Petroleum Inc. – slide 14
    Intelligent Well - Strategic Approach 1.5MM Deliver Business Ensuring that reliable data is Data quality is monitored Value easily available to decision- as part of standard Year 1 makers through many tools operations Level of…
  15. Fourth Quarter 2020 Earnings Presentation – Laredo Petroleum Inc. – slide 15
    Actively Managing our Balance Sheet and Commodity Hedges 800 2.3x Net Debt to Adj. EBITDA1,2 475 600 Debt ( MM) 2.6x Net Debt to 578 Consolidated 400 EBITDAX1,2 361 200 47 MM Cash 250 Balance3 0 FY-21 FY-22 FY-23 FY-24…
  16. Fourth Quarter 2020 Earnings Presentation – Laredo Petroleum Inc. – slide 16
    Guidance The table below reflects the Company's first-quarter and full-year guidance for total and oil production for 2021. Guidance for first-quarter and full-year 2021 adjusts for recent severe freezing weather in the Permian Basin…
  17. Fourth Quarter 2020 Earnings Presentation – Laredo Petroleum Inc. – slide 17
    L A R E D O P E T R O L E U M APPENDIX 18
  18. Fourth Quarter 2020 Earnings Presentation – Laredo Petroleum Inc. – slide 18
    Oil, Natural Gas & Natural Gas Liquids Hedges Hedge Product Summary FY-21 FY-22 Oil total volume (Bbl) 8,084,750 3,759,500 Oil wtd-avg price (/Bbl) - Brent 50.83 47.05 Nat gas total volume (MMBtu) 42,522,500 3,650,000 Nat gas…
  19. Fourth Quarter 2020 Earnings Presentation – Laredo Petroleum Inc. – slide 19
    YE-20 Base Production Decline Expectations 100 Total Production Decline 81.2 80 66.6 MBOE/D 60 54.9 47.5 42.1 37.9 40 79.5 62.3 52.5 45.9 20 41.0 36.9 0 Dec-20 Dec-21 Dec-22 Dec-23 Dec-24 Dec-25 Legacy Howard…
  20. Fourth Quarter 2020 Earnings Presentation – Laredo Petroleum Inc. – slide 20
    Commodity Prices Used for 1Q-21 Realization Guidance Oil: WTI NYMEX Brent ICE (/Bbl) (/Bbl) Jan-21 52.10 55.28 Feb-21 58.26 61.38 Mar-21 59.20 62.13 1Q-21 Average 56.46 59.53 Natural Gas Liquids: C2 C3 IC4 NC4 C5+ Composite…
  21. Fourth Quarter 2020 Earnings Presentation – Laredo Petroleum Inc. – slide 21
    Supplemental Non-GAAP Financial Measures Adjusted EBITDA Adjusted EBITDA is a non-GAAP financial measure that we define as net income or loss plus adjustments for share-settled equity-based compensation, depletion, depreciation and…
  22. Fourth Quarter 2020 Earnings Presentation – Laredo Petroleum Inc. – slide 22
    Supplemental Non-GAAP Financial Measures Consolidated EBITDAX (Credit Agreement Calculation) Consolidated EBITDAX means, for any Person for any period, the Consolidated Net Income of such Person for such period, plus each of the…
  23. Fourth Quarter 2020 Earnings Presentation – Laredo Petroleum Inc. – slide 23
    Supplemental Non-GAAP Financial Measures Net Debt Net Debt, a non-GAAP financial measure, is calculated as long-term debt less cash. Management believes Net Debt is useful to management and investors in determining the Companys leverage…
  24. Fourth Quarter 2020 Earnings Presentation – Laredo Petroleum Inc. – slide 24
    Supplemental Non-GAAP Financial Measures PV-10 (Unaudited) PV-10 a non-GAAP financial measure that is derived from the standardized measure of discounted future net cash flows, which is the most directly comparable GAAP financial…

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