LPI - Earnings call transcript Q1 2021

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Operator

Good day, ladies and gentlemen and welcome to Laredo Petroleum First Quarter 2021 Earnings Conference Call. My name is Carol and I'll be your operator for today. At this time, all participants are in a listen-only mode.

We will be conducting a question-and-answer session after the financial and operations report.

As a reminder, this conference is being recorded for replay purposes. pleasure Mr. my now is to introduce It Ron President, Investor Relations. Hagood, Vice

proceed, You may sir.

Ron Hagood

good you morning. Thank and

today Jason Chief me Chief of Chandler, Bryan Joining our are Senior Financial Senior Officer, Chief Lemmerman, as Vice Karen Officer, Executive management as President additional President team. and Vice Operations well and Pigott, Officer and President members and

our forecasts, statements. you call, we'll today's assumptions we this These including to by Before statements, during be begin expectations, of Private morning, provisions the that let Litigation beliefs, those intended are Safe XXXX. describing making Reform Act and of me forward-looking goals, Securities remind covered be the Harbor

may reasons, a differ results forward-looking these variety actual many statements are of which for control. Our of from our beyond

to reference of non-GAAP included and a our making be operating financial measures Reconciliations news detailing for GAAP afternoon, will quarter we yesterday's release the addition, in XXXX. we to are financial results release. financial news Yesterday issued presentation measures. and In first

the to during refer today's will presentation We call. page by

If at Executive not may our President to Chief or Pigott, on release access now it of presentation, website copy you Jason this have I the call you will and turn over do Officer. www.laredopetro.com. news a

Jason Pigott

our first morning and thank XXXX you for earnings call. Good quarter joining

expenditures. for our turn in under proceeds capital about in the million Our free $XX reduced net execution which We financial in ATM management cash that demonstration in quarter by and shares million and first cost well revolver results reduced reduce $XX to of flow for quarter operational We transformation. million. $XX underpins a are the under we sold as continued the program borrowings generated solid our the strategic

downtime had Sand as indicative County expect and despite transition second quarter. XX% storms. of to wells the efficiency XX% peak drilling our of of the XXXX to such innovation growth Production a quarter this Mine production for grew oil substantial Howard Capital package versus during due sequentially our our we from Oil Howard efficiency winter long-term completion sequential to production. drive reaches our and our the of improvements as wells came in of impact County package second fruition from improvement. continuous quarter Our production to first in X% are February's improvements and of trend quarter of fourth company-owned

plan. teams our to our produced of We I storms the recognize more of natural continue and the With well eliminating quarter. forward our flaring like February. winter reduce our restore to emissions importantly production efforts operations. of gas company ultimately put X.XX% to conclude, do has metrics venting on on component gas or reducing during To only would will ambitious and flaring provide after is key more The in plan greenhouse details venting, Karen the operational an ESG a quickly that, and safely

Karen Chandler

in you, after Thank for to discipline transition deck of I'd team that on all successful reflect weather begin it operations work occurred Jason. and severe we activity all running Jason's and impact. the as was to the safely to minimize efforts Howard of the and as took focus County. to and did to our the teams, us like back the by a in get February. on comments hands seconding It lot of continue quarter Results to first the quickly entire

packages at well delivered County reducing [ph] on in first being $XXX With progress significant make to two per foot. Howard cost. our continue We

were with and first savings volumes We're with XX% mine no main One been per going in of drivers quarter. increase getting supplying winter of used the storm the consistently our after were sand successfully the we XX% with Sand able the source well third-party of $XX,XXX up as cost. company-owned mine we realizing right other has to over to our operations now also sand down well success the of sand the the of We Mine. the at

continued long-term as that could for first of the completion new rigs evaluate cost the we the came are mentioned we than year. drilling the operational the $XXX fully the working that drill potential increasing from by in than as our two were track and beginning were was at with well in continued delayed until per projects believe even first on as the we the we first spend Cost infrastructure capital cadence. This for planned activity at quarter cost, in quarter trend million XXXX activity decreased incurred XXXX budget. year. frac rig less in to as quarter to we on improvements efficiency. Additionally, also of added [ph] Based lower Increasing driven well we feet the quarter positively anticipated. day, just first forward steady some some close current one our per later in efficiencies which and rig in the But levels

to addition with cost also In our County. capital trends lower LOE delivering Howard been we've pleased in

on as the Howard While the well of to BOE County. we we life LOE expect County more $X and for in still per still production bring rise forecast in about Howard

the and evaluate So our high production pressure of few cost on the lift cost. been we operating to originally impact application both wells lower anticipated. in have high far, We've than gas testing operating been rate,

we continue also our more power. optimize purchase data we of and majority [indiscernible] as to wells and gain We to production facilities traditionally

going could operating which of impact positively our forward. cost All

XXXX crew. deliver one to throughout oil continuous as County on quarter growth expect package we We well bring per production frac Howard one in steady running

to lumpiness XX in packages and timing While plan. well there can XX on development our some of large production based the be

in expectations. throughout Howard growth The in well range oil cut. results XXXX production production of to-date oil sequential early as are expect the an as within We County increase our

first our expectation past begun months. a in the couple particularly package. out started with This performance off the As release, line range But [ph] spacing we a overall bit the performing tighter of over this showed in last still to given expectation. Gilbert/Passow well package package of within XX-well the the in quarter's average package has tail is

early performance the spacing expectations will its packages of Subsequent and the Our package second tighter DSU up in believe DSU. We maximize packages wells Trentino/Whitmire more in Wolfcamp. well Wolfcamp. DSU the on Both average in package, space will XX-well per is XX-well performance be to consistent eight per developed the history. the were approximately ahead per value this deliver

DSU of to continue the in which call contiguous hand we progress full end October We section now first make now formed Howard I'll XXXX. to two develop quarter, financial XX,XXX DSU foot laterals. up sets that a Subsequent the for we the our up section This good leasehold. Bryan County section building to acquired the with to update. acquired to

Bryan Lemmerman

the sell were finance to bolt-on strategy. bought $XX Like approximately program, of ATM in our proceeds to portion we We at $X,XXX Authorized where net credit $XX development from our County, facility you, an our also allows the equity and ATM sell $XX drove focus we flow acreage during XX.X% little by the Karen. free interest pay par the notes operational that capital million, initiated combined of able acre. Howard down expense our the proceeds million $XX announced XXX,XXX over In per proceeds facility side of at the quarter program also $XX.X at cash used $XX the a million. a $XX Thank first average transaction transactions price to our When our opportunistically on us place Howard of we pay equity us notes million undeveloped on program program. credit financial shares of using million been we XXXX time-to-time. of the at-the-market and repurchase control the our approximately our the intention with million. to very efficiency to to $XX.XX payment for at mid combined of the down quarter flow put million. while for about County Subsequently, enabled program of opportunistic These at was of fourth in have in making accretive free We on maintained cash of an a we execution, XXs. which stock with capital executed These of discipline February, the our quarter. the totaled for

goal to sheet. continue free the down Recent company. pay price the and debt profile our have Going balance increases strengthen forward, to enhanced commodity is cash of our flow generation

and quarter, our open added progresses, debt further operator free flow first XXXX the XXXX and capabilities. ask that, to reduction questions. add in please to I'll cash the we and intent to we With profile the as hedges confidence our XXXX oil the for line During increasing year more our

Operator

Instructions] from Derrick of your Whitfield comes first line [Operator question the with Stifel. and

Derrick Whitfield

impact the between notable Were on focus Page than for or Storm these wells. the the I'd the differences on noticeable My or sets? differences the approach of first other understand first to perhaps design X first Karen. to two set. question, Winter Uri two flow in your back between Other to D&C chart sets like there

Karen Chandler

for Thanks Derrick. the Hi, question.

at of early looking on design, first there's same in overall same both those the two the really well these answer real were relatively between high are So the packages. a Basically really still the points. is difference even had basic level so no packages no. designed They blowback. at spacing landing

differences Sprayberry evaluate two But performance in to Wolfcamp continue the design the points between no the first and landing different formation. We packages. of really these

Jason Pigott

worse. see just little are packages we little statistically again, just it's or that better And

it's unusual to oil put something these out. kind welled wells gas not of [ph] back just and it's first they're as So - two

Derrick Whitfield

your makes transaction focus can A&D market a Midland that Or perhaps In somewhat a Jason. buyer's to market? I follow-up. market recent from and seller's view for was you the an for basin sellers it A&D of the my sense do you the tilt did That the on anomaly? larger see sense environment in to wanted

Jason Pigott

it purchaser have looked I market, that on talk think a folks the are time. transaction again think that of by the again raised Most good basin. level the lot analyst there's it's the don't that to that that's good things been the so the it, expectations we for at across along that And say and anomalous of there.

risen be bid a bit. the think we in much lower It with things we're price successful again, price think can environment do in transactions. difficult prices narrowing I was especially I do ask have averment. little is to today But a where a

Derrick Whitfield

to-date your on for your success Congrats thanks Fantastic. time. and

Operator

your Brothers. next Tuohy Noel Instructions] question [Operator with of from line the Parks comes

Noel Parks

helped you're assumptions where? completion kind geological were and characteristics and guess choices. the of And where could now? works little going review turn a of review ago, sort Could years been me? on, the I think of your you've And it was spacing bit like acquisition the County initially the you Howard What operator? legacy that I well spacing also, at you since lot. Thanks memory started what what under out to what serves you doing just three the just history just spacing about a

Karen Chandler

kind bit This to Karen. and about talk history of the I'll the is a be happy little step of back acreage.

the of we're So we've acreage and the on developing XXXX kind at XXXX. of now. acreage acquired late right that right County end In close the Howard

One very the because that been it developed. of not had reasons attractive to was us disposition really

for wells, location go development So area. in kind good it there this us a really no to in go so full parent was of and into

So in with active operations early started of transitioned real COVID But that spacing so of operations completion to other late XXXX We in in actually the kind very we that. in actually XXXX. thing, environment to in were just given then prior September Howard Howard quickly the County County. completions and outlined we XXXX

the so really the package. always since been XXXX, operating on to active of months end So completions actually we've first very back four with five going

to So from showing on release. is kind Howard County Slide first well early which here. well the of the packages earnings refer that's and what X the coming the results in really first deployments at getting we're why back We're we look two

on for So the spacing was that's the as them Wolfcamp we in X Howard first Howard Sprayberry, Passow/Gilbert four the the and that development in design wells XX what are. were as plotted two to the packages County in referred the we that we up about Slide wells talked went the the two Trentino/Whitmire and begin packages plan County. that for wells was in This development that

in we work the was work all operators. in offset crew. of As the It's completions rig to done being completions. front at well into the development look technical kind drilling got Clearly a continued really of the lot by is that us, of

on space getting up we've these bit the even of decided that's little in doing County we back will subsequent so to flowing in well Howard packages And back, in that front any be results what of really quarters. next been a

results which we're back our return, So doing. packages. Wolfcamp still these on we'll drilling, We're wells that efficient right overall spacing be the Slide flowing the supporting. what It's now are it's four early wells supporting in wells, in Overall their capital up Sprayberry, at these company performance design high return X, wells high well strong currently looking in strategy are are is rates eight their the history. with rates happy is overall

Our free flow debt. of down strategy cash generation, paying

clearly packages in We strategy. packages these will are to bring that up-space continue on will quarters. more just two be the think supporting continue that first packages as couple of So they and to results on and which move support that will consistent next the help support the that we

been So County that's acreage. since on kind Howard we've of the history acquiring that

Noel Parks

Great, be blip was what thought steel forward might better shape of quarters? this could upwards you're wondering temporary about your thinking are what And turning kind steel or about a into you a thinking had lot. already thanks minute maybe a or you of it maybe if for would helpful. It's I talk was in - cost? up inventory future just your going building on

Karen Chandler

Yes, overall.

team a impacted our works really we some broader inventory We currently. our market cost to and aspect do by not on out have up So business the and managing contracts we do have global and supply our really cost [indiscernible] that seeing every steel chain work see well sure times, we're all we Which one. so in is an we're place of interesting Overall at fluctuations is both down? everything. make impact in that that and time

currently seeing business. to not impacts So really any significant our

Noel Parks

Great.

Operator

with the Capital question Securities. your Tullis And from of line Richard One comes next

Richard Tullis

maybe or Bryan. for Question Jason

the Given plus sort that helped on opportunity XXX,XXX properties quarter. potentially commodity for Does the uptick in this the flow announcements. a legacy the months the seen outside couple present sell current of acreage over the hold monetizing at past to prices of of other you of the recent certainly core that cash acreage acres E&P of an non-core in Howard? focus the look some in We've couple the recent area less

I if just with the some want and part maybe at maybe it to all So into see, acreage. your heightens look of interest legacy

Jason Pigott

question. Yes, great it's a

I think that radar. our something is that's it on

position funds knows, consider bring core much the inventory. in might just of the depending looking Today interest It's bring come with everyone higher the continue on provides we're quality on that in But cash PDP call to to that. how the As flow we debts. strengthen or or carve sheet nano a not transaction, to help selling balance something selling non-op on down that a the field. portion straight would again just and the

just that in things will about of on think are work those we So a lot future. M&A it the the depend

Richard Tullis

think Jason. Okay, $XXX is foot How online forward? the to thanks packages do average Question you I is Obviously even cost mean, nice really lower for Howard potential year-to-date. we in for County the lateral as sustainable well more? there go per than Karen.

Karen Chandler

package little starting foot. County. the bit coming first and is prior Yes, $XXX going that have operations really in in we've the we the We a wanted as we're at to were actual come in a performance about expecting talked really below completions clear Howard we But were to where through.

So packages with we really at well point, $XXX. coming well cost felt comfortable at us the with out two behind first this actual

as about, continues not are potential upward any So on That talk we pressures service there. all really pressure there seeing well significant cost? we're

opportunity. I continue as to far performance optimize for there's improvement. and Yes, our think design As

the performance be operations will type improvements that the and do on providers sand We're talked We have. it cost Both pressure business. side. just external balancing, to So sure that our mine there any owned frac of into hearing is really we're and the companies getting pressure we make our sand, just of on that completions, we're managing sand. trucking service how about that continue kind - side sub of drive from drilling, we

be So that, that really which to own the off we're insulated a now we're from of is right decision sand our big with providing locations.

performance and of opportunity [indiscernible] that winter completions. I the the us There's overall basis, that both So we're with continue with. and performance severe in to doing continued impacted on set February drilling even really a storm seeing again that and shared up for performance. pretty think good we're quarterly We've been well

Richard Tullis

Thanks to for Karen and everyone their helpful thanks that was response.

Operator

of comments. for gentlemen, Mr. back session for and over come we've Q&A Hagood to turn conclusion today ladies the our the and And call to to Ron I'll the closing

Ron Hagood

call for Thank joining morning. our interest Laredo. great us you and appreciate in call this our have concludes for We a your This morning.

Operator

Ladies concludes and this gentlemen, participating. you Thank conference. for today's

day. wonderful have You a

now all may You disconnect.

Vital Energy (VTLE) 6 May 212021 Q1 Earnings call transcript