Laredo Petroleum (LPI) Update - Jan 14

Laredo Petroleum (LPI) Update - Jan 14

Postby dan_s » Thu Jan 14, 2021 2:13 pm

Since my last newsletter on 12-29-2020, LPI is up 33%.
Just prior to drafting the newsletter, I got a report from Goldman Sachs where they rated LPI a SELL with a price target of $14.00. I found it odd because GS had turned bullish on oil prices, with the head of their global commodities research group predicting that Brent would top $65/bbl by late 2021.
So, I double check my forecast/valuation model and actually reduced my valuation to $30.00/share, compared to the $20.71 closing price on 12-26-2020.

I am updating my forecast/valuation model now and my valuation is going to end up a lot higher.
Dan Steffens
Energy Prospectus Group
dan_s
 
Posts: 24706
Joined: Fri Apr 23, 2010 8:22 am

Re: Laredo Petroleum (LPI) Update - Jan 14

Postby dan_s » Thu Jan 14, 2021 3:49 pm

I have updated my forecast/valuation model for LPI and posted it to the EPG website.

My valuation increases by $8 to $38 per share.

In June, Laredo completed a 1 for 20 reverse stock split. It only has 12.1 million shares of common stock outstanding. so per share results can make big moves up or down with rather small changes in the forecast model. I believe the risk is to the upside in my model, especially in 1H 2021 where I am using oil prices below the strip.

In the Company's January presentation they say that their recently completed 15-well package is producing above pre-drill estimates and that production is still going up.
Dan Steffens
Energy Prospectus Group
dan_s
 
Posts: 24706
Joined: Fri Apr 23, 2010 8:22 am


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