Laredo is a pure play on the Permian Basin. It has one of the best hedge books. In 2015 they have received cash settlements on their hedges of more than $240 million.
For 2016:
> 85% of their oil production is hedged at $70.84/bbl
> 68% of their natural gas production is hedged at $3.00/mcf
They also have about a third of their 2017 production hedged at good prices.
I have updated my forecast model and it will soon be available on the EPG website.
My adjusted valuation is $14.70/share, compared to First Call's price target of $9.40/share.
If you are not familiar with LPI, you should read our profile which can be found under the Sweet 16 tab on the EPG website. Laredo has a unique production method that is a good fit for the stacked pay zones of the Permian Basin.
Reminder: The oil, gas and NGL prices used in my forecast models are adjusted for each company's hedges and regional price differentials.
Laredo Petroleum (LPI)
Laredo Petroleum (LPI)
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group