LPI - Earnings call transcript Q2 2022

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Operator

Good day, everyone. My name is Kelly and I'll be your conference operator for today. At this time, I'd like to welcome everyone to the Laredo Petroleum Inc. Q2 2022 Earnings Conference Call. Today's call is being recorded. placed to been noise. any have lines on prevent mute background All the be will remarks, question-and-answer After there a speakers' session. [Operator pleasure Instructions] to my introduce Mr. It is now Ron Relations. of Hagood Vice President Investor sir. ahead Please go

Ron Hagood

Thank you morning. and good

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

goals, including control. we the call, forward-looking be forecasts, many those intended describing are will forward-looking which beliefs, of Safe the by statements beyond today's During Private Reform statements. to our reasons, results Actual of are statements Securities from making XXXX. may expectations, provisions covered these assumptions a and for Litigation of our These be of differ Act Harbor variety

Press can operating results In the yesterday quarter and making www.laredopetro.com. be GAAP presentation Jason over will now measures are measures. to release Executive be detail in website financial that our Pigott, we our for financial non-GAAP at to Officer. and addition XXXX. we'll press and accessed call the and included issued Conciliation turn to on Chief I second reference release President financial presentation

Jason Pigott

for morning you and Thank results. you, Ron. Good of for our joining our thank us discussion quarter second

start oil I'll Our financial XXXX. and quarter, and for production cash outlook, capital sensitivities results we the for projections have and quarterly XXXX updated operational our given also updated results. and our flow with free

cash delivering record Our flow. second adjusted free EBITDA quarter results and company exceeded expectations

million targets we debt. To-date, May immediately face $XX.X program equity on debt Second, we of reduction repurchase million and XXst. began term of $XXX million on equity value delivering we repurchased $XX.X our announced and

the times absolute quarter. ratio debt, second X.X addition in in times our X.X leverage In first quarter to to the from decreased reducing

to we Third, demonstrate capital discipline. continue

full amount of capital million. facilities, due that timing non-op the acceleration small quarter of completions, and second in operations year of our the associated ongoing XXXX little primarily higher expected, half, was to capital expected in than associated a came a budget changing Second of with activity not $XXX

are our in and per consisting Moving second Howard of oil our and XX,XXX-foot production per wells flow XX,XXX for into barrels forecast. quarter, year XX,XXX package much day now leach of barrels of is outlook. between the end in County. to the prior unit full wells Oil guidance southeastern than At versus oil million. These in line free $XXX six updated $XXX a to and we of production the Full most prior year wells cash the at wells XX,XXX XXXX of of the day. underperforming stage. are for the be XXXX six-well the oil still turned has expected million The wells per XX,XXX light the offset longer is versus now $XXX barrel taken our ramp prior remainder flow projections expected prices to of to of approximately be XXXX XXXX WTI year

projection, counts, range. compared the trajectory prior Stress or the additional repurchases $XXX to plan. we equity or XXXX the outlook for from expect the have efficiencies, versus our no Currently, and There's current price leach and savings and expenditure a barrel drilling per the our we incorporated plan. development our reduction initial XXXX, of of Our free debt package, flow we capital completion date. low how that, oil projections to of XXXX, $XX $XXX interest million, and changed approximately, growth repurchase cash WTI impact inventory nothing for impact execute of company, single-digit has to expect debt million new production oil

approximately $XX financial second of year half impact the XXXX, XXXX all and over full updates all of is For our of million.

equity million will repurchase over are $XXX We $XXX turn sub Karen. now committed times. and debt to of leverage the program, on reduction target X.X target million, I ratio of absolute delivering call our to our

Karen Chandler

Thank seven even you, that the including adjustments slightly morning. amount quarter, facilities, expenses Production of Jason, of good our acceleration payout XX% acceleration operations, ongoing was and of a over related and to average primarily killed expenditures completions wells. timing quarter Total outlined inflation, reached wells About mainly estimates. In quarter that due which interest second was of ranges, when to the the guided expected within the quarter a was working second XX expectations, the slight in release. half. to original on a was that the our we above second than diesel completed to wells earnings prior in running and due and were the was non-op associated associated with capital of increase into small higher to

we second our costs For half, numbers. have higher these diesel incorporated into capital

be budget of $XXX capital our and to million in and year full XXXX approximately million. We $XXX third expect to maintain fourth both the quarters

and of only in based that well the unit seven Despite Howard significant and to well to mentioned, wells central of developed de-risk formation, working disappointing. were a little improve information. despite been DSU. County Howard degrades in We standard understanding on spacing Very XXXXX-foot widened leach of and A potential two time. than per production in the strategies to our is on remediation continue quality and pull good on traditionally in plan Wolfcamp package gain These as and over co-developing for that, A position. from amounts the strategies the the options rock on As A. production oil southeastern artificial evaluating South. back the returns months feel Jason this still killed producing and also of acreage We're projected wells XX and fuller We efforts in we production. six has currently edge previous around to our developed Wolfcamp during results low to data water been in the watch, take we additional wells the package quarter Lower leach optimize and have the Spraberry, our of package, these the other area, the generally changes with resulted packages decided control leach The development development more Wolfcamp the a measures versus six-well

completions and feet are possible data I the of come full to in Overall impact XXXX County to time related locations are North and production in North data improvements million of from have our and from inventory needed. the issued low in to XXXX This Focus Primary locations, above in XXXX the is our our These using the of do also our Howard, impact without in being in keeping rigs. XXXX long-term frac in Given continued our west that the being developed believe to offsetting leach productivity can XXXX a that developed remainder the our earnings is additional high-quality the you a are fields XX% additional and as expected Central this half reason and $XXX total production for packages year remainder the drilling XXXX. North abundance projection year. approximately within and for production Howard than we of turn any Howard. Bryan five activity substantially plenty you Worthy/Buchanan completed the plan. preliminary slide In to Connor XXXX XXXX, to in expected call spot the of XX Howard earnings run for in per outlook, oil negative to if and is well Central giving release XXXX year. DSUs most crew us and program. over adding of results we on fourth Within find all expected of of package of fully not our we on for operate able in flexibility performance development fields how spot the not of are crew this do able provides those respectively. wells, a of our the frac low outlook, be in of more Howard. capital deep we oil North is compared locations count anticipating quality of single-digit wells the is for updated impacts, drilling see current quarter and as better budget door financial are preliminary to in leach year bears early as out. online currently the are two half spot to guidance our offsets driven to The presentation, $XXX any capital-efficient in million. most XXXX quarter oil X our oil earnings crew next or will XXXX activity frac drill-ready as Howard. The growth year [indiscernible] is our Howard the first in in counts, XXXX second XX by and now Northwest expected expectations day, DUC move operations five we difference remaining first full of adjust anticipated the the direct of development the the estimate are XXXX trajectory north XXXX rock from a update. offset months these in

Bryan Lemmerman

with We at company revolving repurchased record of $XXX with performance cash. cash financial capital revolver X.X look at with stands our aggressively flow and times. free delivered quarter X.X of of balance Taking took zero. reduced We fulfilling facility to our end $X.X We adjusted undrawn. in shareholders. completely credit strong debt have a commitment cash We balance to million we quarter. very sheet. ended our leverage our and And we billion $XXX Liquidity Karen. million and EBITDA. turn Thanks, quarter We by the as equity the second return at generated approximately to leverage Tuesday, the

of leverage in goal, believe environments. sub-onetimes of $XXX us in position approximately QX to million absolute our reiterate debt putting million price average at total $XXX Tuesday, of we us which purchases have Also goal been the target and XXXX, in be date. to the skewed has of notes leaves our approximately the to million purchased $XXX we $XX. our $XX target a achieve XXXX. notes a reiterate net million XXXXs We of lower an a of times These leverage one the reduction XXXXs of levered will of year. million The achieving of million $XXX Laredo debt. $XX $XX You million plan the at toward of of $XX.X approximately with through and XXXXs, the repurchase purchased price end of XXXX million Through

through price stock at trading, a our $XX of side Tuesday's equity average the On we share. the an million $XX.XX of equation, approximately repurchased have of

for and towards cash used flow free that indicates scenario assets, price line trading prior equity to approximately we and continue shares, under over below guidance. of at can for when proxy $XX our we million XXXX. two-year directed somewhat will our We period cash to the is repurchase share pricing end Laredo our in over came million where cash flow of M&A quarter million, for on methodically. guidance, our shares expected XXXX flows same decrease a at for through a debt are our expectations will market, those are and of with repurchase But This prices in the approximately current accelerate our free the repurchases. Free generate we represents these were $XXX million our the the second $XXX last which Dated cash $XXX guidance, flow in assets of repurchases.

still what have On go after not the future, the the finance that right of in scale mix front, but M&A and we found be many that to our been matters for of strategy a the Do how foreseeable it. and diligent actively will in remain believe opportunities have PDP. inventory that at will M&A have we looking we and market part we

it comments. that is that, over and accretive I not final to So deleveraging for With does our will to derail shareholders it Jason goals. turn

Jason Pigott

for joining us Operator, the and questions. all lines open you, for you Thank please Bryan, today. thank

Operator

Stifel. with hear We'll Instructions] from first Whitfield today Derrick [Operator

Derrick Whitfield

Thanks morning, all. and good

Jason Pigott

morning, Derrick. Good

Derrick Whitfield

question, to wanted leach appears XXXX, DSU DSU. perhaps data with there's west you of It I speak For to a noticeable both that which a develop be DSU speak this was the pre Howard the that leach from if highest within risk DSU? post-drill my confidence also in County. indicated your to DSU well degree your first the performance east to in start and you the difference commercial west, and to to within plan Could would

Jason Pigott

Thanks, Yes. Mikell Pigott. Derrick. is This

pursing Western So, within yes, the DSU wells. wells leach highest are itself, absolutely the the most

water higher cut we we As lower the see and to oil wells. the east, in most move Eastern a production

the developed current And around DSUs so, XXXX. that combined will with that production in be undeveloped our offsetting

ultimately around by on We confidence leach seeing we're in sides, both DSUs those issues have strong the which unaffected us that that production are the they gives package.

Derrick Whitfield

would as Terrific. the follow-up most, this your Could cut oil some NPV it parameters a with meaningfully associated And leach impact put around trade doesn't that rate. of or just DSU. the you your just but on if cost At Am seem appreciate? I to correctly? be depending at it frame wells, thinking your already the discount to discount a about at you PDP

Bryan Lemmerman

Yes, this been already has Bryan. is Derrick, The capital spent.

of half your about would think of cash be year. $XX I the to this And flows get the it impact. impact going is think forward. that of portion on the will impact the NPV the That in all million back way almost largest

Derrick Whitfield

your all for time. That’s for me. Terrific. Thanks

Operator

to any back like things I'd remarks. turn time Hagood this closing at to for Mr. And

Ron Hagood

you Laredo. This interest appreciate this call. thank joining morning. for this morning's in us your concludes Well, We

Operator

And for Thank again, conference. you us. today's joining will that conclude all

now You may disconnect.

Vital Energy (VTLE) 4 Aug 222022 Q2 Earnings call transcript