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March 2015 Corporate Presentation – Laredo Petroleum Inc.

Laredo Petroleum Inc. · Mar 5, 2015 · 34 slides

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Slides

  1. March 2015 Corporate Presentation – Laredo Petroleum Inc. – slide 1
    Corporate Presentation March 2015
  2. March 2015 Corporate Presentation – Laredo Petroleum Inc. – slide 2
    Laredo Petroleum Highlights Raised 1.1 billion in net proceeds from equity and notes issuances in March 20151 Liquidity of 950 million2 and no near-term debt maturities Hedged thoroughly:3 More than 95% of anticipated oil…
  3. March 2015 Corporate Presentation – Laredo Petroleum Inc. – slide 3
    Concentrated Asset Portfolio Focused in Midland Basin 186,227 gross / 155,405 net acres1 Proven Hz development in four stacked Howard Mitchell zones (Upper, Middle & Lower Wolfcamp and Cline) Potential additional zones for Hz…
  4. March 2015 Corporate Presentation – Laredo Petroleum Inc. – slide 4
    2015 Budget Estimated 2015 Hz Completions1 20 Drill & Complete Operated 375 MM 18 Gross Horizontal Completions by Quarter (Operated) Non-op 55 16 Facilities 35 14 LMS Infrastructure 25 12 Land & Seismic 10 Other 25 10 525…
  5. March 2015 Corporate Presentation – Laredo Petroleum Inc. – slide 5
    Permian Production Growth Initial Delineation Accelerated Delineation Development Testing Multi-well Pad Development 50 45 40 35 30 MBOE/D 25 20 15 10 5 - 1Q-11 2Q-11 3Q-11 4Q-11 1Q-12 2Q-12 3Q-12 4Q-12…
  6. March 2015 Corporate Presentation – Laredo Petroleum Inc. – slide 6
    2014 Reserve Summary (2-Stream)1 300 Permian Reserve Growth 300 55 247 247 250 250 204 200 204 160 MMBOE 12 200 150 101 MMBOE 100 150 50 0 100 YE-2011 YE-2012 YE-2013 YE-2014 50 By Type PUD 43% 0 57%…
  7. March 2015 Corporate Presentation – Laredo Petroleum Inc. – slide 7
    2014 Reserve Conversion to 3-Stream 350 By Product 82 297 300 25% 47% 247 32 250 28% MMBOE 200 Oil NGL Natural Gas 150 By Type 100 50 43% 57% 0 Total Proved Natural Gas NGL Reserves Total Proved Reserves…
  8. March 2015 Corporate Presentation – Laredo Petroleum Inc. – slide 8
    Upper Wolfcamp Horizontal Type Curve (3-Stream) EUR: 850 MBOE (45% oil) 250,000 Cumulative Production (BOE)1 30-day peak IP: 735 BOE/D (70% oil) 200,000 150,000 Completed lateral length: 7,500 100,000 B-factor: 1.55…
  9. March 2015 Corporate Presentation – Laredo Petroleum Inc. – slide 9
    Middle Wolfcamp Horizontal Type Curve (3-Stream) EUR: 750 MBOE (50% oil) 250,000 Cumulative Production (BOE) 1 30-day peak IP: 640 BOE/D (70% oil) 200,000 150,000 Completed lateral length: 7,500 100,000 B-factor: 1.55…
  10. March 2015 Corporate Presentation – Laredo Petroleum Inc. – slide 10
    Lower Wolfcamp Horizontal Type Curve (3-Stream) EUR: 700 MBOE (45% oil) 250,000 Cumulative Production (BOE)1 200,000 30-day peak IP: 615 BOE/D (65% oil) 150,000 Completed lateral length: 7,500 100,000 B-factor: 1.55 50,000…
  11. March 2015 Corporate Presentation – Laredo Petroleum Inc. – slide 11
    Cline Horizontal Type Curve (3-Stream) EUR: 725 MBOE (50% oil) 250,000 30-day peak IP: 910 BOE/D (60% oil) Cumulative Production (BOE)1 200,000 150,000 Completed lateral length: 7,500 100,000 B-factor: 1.55 50,000…
  12. March 2015 Corporate Presentation – Laredo Petroleum Inc. – slide 12
    Horizontal Well Economics1 70% 50% Upper Wolfcamp Middle Wolfcamp 45% 60% 40% 50% 35% ROR (%) ROR (%) 40% 30% 25% 30% 20% 20% 15% 10% 10% 5% 0% 0% 7.5 7.0 6.5 6.0 7.5 7.0 6.5 6.0 Well Cost (MM) Well Cost (MM) 35%…
  13. March 2015 Corporate Presentation – Laredo Petroleum Inc. – slide 13
    Concentrated Multi-Zone Horizontal Development 1 3,700 horizontal locations have been identified for development in the initial four zones 50% of acreage is ready for multi-zone development in initial four zones with potential in…
  14. March 2015 Corporate Presentation – Laredo Petroleum Inc. – slide 14
    Identified Path for Growth1 4,000 3,500 3,000 MMBOE (3-Stream) 2,500 2,300 2,000 1,500 1,000 500 297 0 Total Additional Additional Total Proved De-risked Potential Resource Reserves 1 Resource Resource 3…
  15. March 2015 Corporate Presentation – Laredo Petroleum Inc. – slide 15
    Concentration of Resources Drives Efficiencies Not to scale Represents 5,000 ft Laredo is focused on developing the entire resource and maximizing operational efficiency by drilling stacked laterals on multi-well pads and…
  16. March 2015 Corporate Presentation – Laredo Petroleum Inc. – slide 16
    Resource Characterization Earth Model Process Seismic inversion and INPUTS Layer-Based modeling petrophysical modeling Reservoir properties model Seismic horizons Upper Wolfcamp Formation tops Petrophysical data Seismic…
  17. March 2015 Corporate Presentation – Laredo Petroleum Inc. – slide 17
    Successful Canyon Horizontal Test Laredos first Canyon test well completed in 4Q-14: 30-day average IP of 1,151 BOE/D Based on extensive data, including 3D seismic, single-zone tests and petrophysical logs, we believe the Canyon…
  18. March 2015 Corporate Presentation – Laredo Petroleum Inc. – slide 18
    Production Corridors Enhance Long-Term Value Oil Gathering Station Oil Takeaway Pipeline Oil Gathering Line Gas Lift Compression Facility Gas Gathering Line Each production corridor Water Recycling Facility will support…
  19. March 2015 Corporate Presentation – Laredo Petroleum Inc. – slide 19
    Laredo Midstream Services Introduction Laredo has built its wholly-owned gathering, transportation and marketing subsidiary, Laredo Midstream Services (LMS) Water Distribution/Recycle: Ensures water availability for simultaneous…
  20. March 2015 Corporate Presentation – Laredo Petroleum Inc. – slide 20
    Medallion Pipeline COLORADO CITY HUB Medallion is a 65,000 BO/D pipeline (expandable to 130,000 BO/D) in which Laredo owns a 49% interest MARTIN HOWARD MITCHELL Laredo is an anchor shipper with initial committed volumes of…
  21. March 2015 Corporate Presentation – Laredo Petroleum Inc. – slide 21
    Preserving Financial Flexibility 950 million of liquidity1 1,200 1,000 Borrowing Base No near-term maturities 800 MM 600 Net debt1/EBITDA2 ratio of 2.1 400 200 Interest savings of 30 million annually - from balance…
  22. March 2015 Corporate Presentation – Laredo Petroleum Inc. – slide 22
    Commodity Hedges Oil Natural Gas/NGL 25,000 140,000 80.99 Floor 120,000 20,000 100,000 3.00 15,000 Floor 80,000 MMBtu/D 81.84 BO/D Floor 3.00 10,000 60,000 Floor 77.22 Floor 40,000 5,000 20,000 0 0…
  23. March 2015 Corporate Presentation – Laredo Petroleum Inc. – slide 23
    Oil Hedges Open Positions As of December 31, 2014 (1) 2015 2016 2017 Total (2) OIL Puts: Hedged volume (Bbls) 456,000 - - 456,000 Weighted average price (/Bbl) 75.00 - - 75.00 Swaps: Hedged volume (Bbls) 672,000 1,573,800 -…
  24. March 2015 Corporate Presentation – Laredo Petroleum Inc. – slide 24
    Natural Gas Hedges Open Positions As of December 31, 2014 (1) 2015 2016 2017 Total (2) NATURAL GAS Collars: Hedged volume (MMBtu) 28,600,000 18,666,000 - 47,266,000 Weighted average floor price (/MMBtu) 3.00 3.00 - 3.00 Weighted…
  25. March 2015 Corporate Presentation – Laredo Petroleum Inc. – slide 25
    Laredo Petroleum Highlights Raised 1.1 billion in net proceeds from equity and notes issuances in March 20151 Liquidity of 950 million2 and no near-term debt maturities Hedged thoroughly:3 More than 95% of anticipated oil…
  26. March 2015 Corporate Presentation – Laredo Petroleum Inc. – slide 26
    Appendix
  27. March 2015 Corporate Presentation – Laredo Petroleum Inc. – slide 27
    Significant Data Inventory Garden City Data Inventory 1 3,700 of whole cores in objective Howard Mitchell section 14 whole cores 715 SWC samples 56 single-zone tests from objective section (Spraberry to Ellenberger) 8,000…
  28. March 2015 Corporate Presentation – Laredo Petroleum Inc. – slide 28
    PDP Reserves 5-Year Decline 140,000 120,000 100,000 Annual PDP (MBOE)1 80,000 60,000 40,000 20,000 - YE 2014 YE 2015 YE 2016 YE 2017 YE 2018 YE 2019 Year 1 Year 2 Year 3 Year 4 Year 5 12% PDP Reserve 9% PDP…
  29. March 2015 Corporate Presentation – Laredo Petroleum Inc. – slide 29
    Processing Plant Capacity with LPI Direct Connectivity Rawhide Plt Conger Plt 75 MMcf/D 25 MMcf/D Bearkat Plt 60 MMcf/D Processor DCP Midstream High Plains Plt 200 MMcf/D Atlas Glasscock Sterling Plt 62 MMcf/D Ector Midland…
  30. March 2015 Corporate Presentation – Laredo Petroleum Inc. – slide 30
    Sales Price Diversification1 Firm transportation out of the Permian Cushing 16,000 BO/D committed to Longhorn, increasing annually to 22,000 BOPD in Wichita Falls three years Colorado City BridgeTex 10,000 BOPD committed on…
  31. March 2015 Corporate Presentation – Laredo Petroleum Inc. – slide 31
    Credit Agreement Financial Covenants Current Ratio Current assets to current liabilities ratio must be greater than 1.0 Credit facility availability is added to current assets for purposes of the calculation Excludes any current…
  32. March 2015 Corporate Presentation – Laredo Petroleum Inc. – slide 32
    Sample Horizontal 2-Stream to 3-Stream Conversion Laredo presents 3-stream reserves and production based on gas plant economics that reflect the actual volumes recovered from the tailgate of the plant and adjust for system losses and…
  33. March 2015 Corporate Presentation – Laredo Petroleum Inc. – slide 33
    Two-stream to Three-stream Conversions 1Q-14 2Q-14 3Q-14 4Q-14 FY-14 Production (2-Stream) BOE/D 27,041 28,653 32,970 39,722 32,134 Production % oil 58% 58% 59% 60% 59% Production (3-Stream) BOE/D 32,358 33,829 38,798 46,379…
  34. March 2015 Corporate Presentation – Laredo Petroleum Inc. – slide 34
    Adjusted EBITDA Reconciliation ( thousands, unaudited) 2013 2014 Net income 118,000 265,573 Plus: Interest expense 100,327 121,173 Depletion, depreciation and amortization 234,571 246,474 Impairment expense -- 3,904 Write-off of…

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