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Laredo Petroleum Announces Transformative Transactions

Nachrichtenquelle: globenewswire
10.05.2021, 00:00  |  156   |   |   

Acquisition of High-Margin, Oil-Weighted Howard County Leasehold

Divestiture of Gas-Weighted Reserves in Reagan/Glasscock Counties

TULSA, OK, May 09, 2021 (GLOBE NEWSWIRE) -- Laredo Petroleum, Inc. (NYSE: LPI) ("Laredo" or the "Company") today announced the signing of a purchase and sale agreement to acquire the assets of Sabalo Energy, LLC ("Sabalo"), a portfolio company of EnCap Investments L.P. ("EnCap"), and a non-operating partner for approximately $715 million, subject to customary closing price adjustments, comprised of $625 million in cash and approximately 2.5 million shares of Laredo common equity. Additionally, the Company announced the sale of 37.5% of its operated proved developed producing ("PDP") reserves in its legacy leasehold in Reagan and Glasscock counties ("Legacy") to an affiliate of Sixth Street Partners, LLC ("Sixth Street") for proceeds of $405 million and additional potential cash-flow based earn-out payments over the next six years. None of the PDP reserves are located in Howard or Western Glasscock counties. Both transactions are expected to close July 1, 2021.

"The transformational impact for Laredo of the combined transactions is significant," stated Jason Pigott, President and Chief Executive Officer. "Upon closing, we will be positioned for sustainable Free Cash Flow1 generation and significant deleveraging, have more than 30,000 highly productive, contiguous net acres in Howard County and a near-term pathway to increasing our oil cut to more than 50% from the current 30%. The value derived from employing our efficient, low-cost operations in Howard County has already been established on our current leasehold and we expect to perform equally well on this new acreage. Additionally, we will be applying our ESG best practices to the development of this acreage, maintaining our prior commitments to reducing greenhouse gas intensity, methane emissions and eliminating routine flaring."

Financial Highlights:

  • Combined transactions expected to be accretive to long-term Free Cash Flow1 and Adjusted EBITDA1 per share
  • Transforms the cash generation profile of the Company, expected to drive total Free Cash Flow1 through FY-25 of >$700 million at current strip prices
  • Anticipated deleveraging beginning in second half of 2021, with Net Debt/TTM Adjusted EBITDA1 approaching 1.5x by YE-22 and 1.0x by YE-25
  • Enables mid-single digit annualized oil production growth at 50%-70% reinvestment rate through FY-25
  • Company oil cut expected to rise to 50% of total production by YE-21, increasing margins per barrel of oil equivalent ("BOE")
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Laredo Petroleum Announces Transformative Transactions Acquisition of High-Margin, Oil-Weighted Howard County Leasehold Divestiture of Gas-Weighted Reserves in Reagan/Glasscock Counties TULSA, OK, May 09, 2021 (GLOBE NEWSWIRE) - Laredo Petroleum, Inc. (NYSE: LPI) ("Laredo" or the "Company") today …

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