Our initial profile on the company has been posted under the Watch List Tab.
Laredo Petroleum, Inc. (LPI) is the newest member of our Small-Cap Growth Portfolio. It is a “Pure Play” on the Permian Basin and company guidance is for over 30% annual production growth the next three years. Laredo’s market-cap is over $3.6 Billion.
I want to get this one to you a couple weeks before they release 4th quarter results, because I think we may get a chance to buy it on a dip. [Warning: I am terrible at short-term market timing.]
The reason I think the share price may dip for us is because Laredo is going to report a significant production decline from Q3 to Q4 (approximately 5,000 boepd) for two reasons:
1. They sold their entire stake in the Oklahoma Anadarko Basin last August for $438 million, which was producing over 8,000 boepd, and
2. Their 4th quarter production was impacted by weather related power outages in the Permian Basin.
This stuff is public knowledge and I have included it in my forecast model, BUT the Wall Street crowd tends to over-react to production declines, even the ones they have been told to expect. Of course, now that I have told you this it won’t happen.
Laredo’s CapEx budget for 2014 is $1Billion. They are really going to get after it this summer and it should be fun to watch.
The Permian Basin is one of the Big Three that Wall Street is in love with.
Laredo Petroleum Inc. (LPI):
Laredo Petroleum Inc. (LPI):
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Laredo Petroleum Inc. (LPI):
4th quarter production was more than 1,000 boepd higher than what I used in my forecast model to value the shares. - Dan
TULSA, OK - February 11, 2014 - Laredo Petroleum, Inc. (LPI) ("Laredo" or "the Company"), today announced proved reserves and preliminary operating results for year-end 2013.
Proved Reserves and Operating Results Highlights
• Produced 11.2 million barrels of oil equivalent ("MMBOE") in 2013 with 9.1 MMBOE of Permian production, an increase of approximately 20% in Permian production; fourth-quarter 2013 production totaled 24,426 barrels of oil equivalent per day ("BOE/D")
• Replaced approximately 577% of Permian production from the drill bit, with total production replacement of approximately 487% at a finding and development cost of $12.00/BOE
• Increased proved reserves to a record 203.6 MMBOE, up approximately 27% adjusted for the Anadarko Basin divestiture and up approximately 8% from year-end 2012
• Increased oil percentage of proved reserves to approximately 55% from 52% in the prior year
• Increased the pre-tax present value ("PV-10")(1) of the Company`s reserves to $3.1 billion, up approximately 30% from year-end 2012
"In 2013, Laredo continued along the multi-year path we initiated in 2011 to maximize the value of our Permian-Garden City acreage," said Randy A. Foutch, Laredo Chairman and Chief Executive Officer. "After successfully delineating more than half of our acreage in 2012, we embarked on a very disciplined drilling plan in 2013 to determine the optimal initial development program for this asset. In executing this plan in 2013, we grew our Permian reserves 27%, grew our Permian production 20%, sold our Anadarko Basin assets and redeployed the capital into the Permian and positioned the Company for a multi-zone development program in 2014. We believe execution of this program in 2014 and in future years will drive continued reserve and production growth, decrease unit F&D costs and enhance the value of our Permian-Garden City asset."
TULSA, OK - February 11, 2014 - Laredo Petroleum, Inc. (LPI) ("Laredo" or "the Company"), today announced proved reserves and preliminary operating results for year-end 2013.
Proved Reserves and Operating Results Highlights
• Produced 11.2 million barrels of oil equivalent ("MMBOE") in 2013 with 9.1 MMBOE of Permian production, an increase of approximately 20% in Permian production; fourth-quarter 2013 production totaled 24,426 barrels of oil equivalent per day ("BOE/D")
• Replaced approximately 577% of Permian production from the drill bit, with total production replacement of approximately 487% at a finding and development cost of $12.00/BOE
• Increased proved reserves to a record 203.6 MMBOE, up approximately 27% adjusted for the Anadarko Basin divestiture and up approximately 8% from year-end 2012
• Increased oil percentage of proved reserves to approximately 55% from 52% in the prior year
• Increased the pre-tax present value ("PV-10")(1) of the Company`s reserves to $3.1 billion, up approximately 30% from year-end 2012
"In 2013, Laredo continued along the multi-year path we initiated in 2011 to maximize the value of our Permian-Garden City acreage," said Randy A. Foutch, Laredo Chairman and Chief Executive Officer. "After successfully delineating more than half of our acreage in 2012, we embarked on a very disciplined drilling plan in 2013 to determine the optimal initial development program for this asset. In executing this plan in 2013, we grew our Permian reserves 27%, grew our Permian production 20%, sold our Anadarko Basin assets and redeployed the capital into the Permian and positioned the Company for a multi-zone development program in 2014. We believe execution of this program in 2014 and in future years will drive continued reserve and production growth, decrease unit F&D costs and enhance the value of our Permian-Garden City asset."
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group