Laredo Petroleum (LPI)
Posted: Tue Feb 09, 2016 6:40 pm
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.
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.