Laredo Petroleum (LPI) Reports In-Line Q3 EPS

Laredo Petroleum (NYSE: LPI) reported Q3 EPS of $0.21, in-line with the analyst estimate of $0.21. Revenue for the quarter came in at $193.57 million versus the consensus estimate of $198.03 million.

2019 Third-Quarter Highlights

• Produced 27,830 barrels of oil per day ("BOPD") and 81,921 barrels of oil equivalent ("BOE") per day, exceeding oil production guidance for the quarter by 2% and total production guidance by 4%
• Generated $48.9 million of Free Cash Flow and reduced the amount outstanding on the Company's credit facility by $50.0 million, maintaining Net Debt to Adjusted EBITDAa at 1.7 times
• Reduced controllable cash costs of combined unit lease operating expenses ("LOE") and unit cash general and administrative expenses ("G&A") to $4.41 per BOE, a 27% decrease from full-year 2018 results of $6.07 per BOE
• Reduced well costs to $660 per lateral foot for Laredo's standard completion design, a decrease of 14% from year-end 2018 costs of $770 per lateral foot
• Received net cash of $23.8 million on settlements of derivatives as the Company's hedges mitigated the impact of commodity price declines

"Beginning in late 2018 and throughout 2019, we have made a significant transition from being a Company that sought to maximize net asset value to being a returns and Free Cash Flowb generation focused Company," stated Jason Pigott, President and Chief Executive Officer. "By optimizing development spacing and driving costs down, we substantially improved capital efficiency in 2019 and have generated almost $40 million of Free Cash Flow in the first nine months of the year. The pending Howard County acquisition we are announcing today is our next strategic step to maximize and create additional value for our stakeholders. Utilizing cash flow from our existing production base to develop higher-margin inventory transforms our near-term development program. Oil-rich inventory at the front of our rig schedule creates a step change in capital efficiency, leading to increased oil growth and Free Cash Flowb expectations in 2020 and 2021 at lower capital spending levels."

"We do not expect this transaction to be a unique occurrence," continued Mr. Pigott. "We will continue to pursue acquisitions of high-margin inventory that improve our corporate returns when developed with cash flow from our existing production. Similar to this transaction, we will be focused on buying assets at valuations that are quickly accretive on a debt-adjusted per share basis and dedicating Free Cash Flowb to debt repayment to maintain a competitive leverage profile."

For earnings history and earnings-related data on Laredo Petroleum (LPI) click here.

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