Laredo Petroleum proposes debt swap and updates production numbers for 2019
TULSA — Laredo Petroleum is seeking to refinance nearly $1 billion in debt.
The company on Monday announced an incentivized early retirement offer to holders of $450 million in unsecured debt due in January 2022 and $350 million in unsecured debt due in March 2023.
At the same time, it’s offering investors an opportunity to acquire $450 million in new senior unsecured notes due in 2025 and $450 million in new senior unsecured notes due 2028 in a registered underwritten offering.
The company stated it expected a final settlement date on the early retirement offer would be Feb. 5. It did not disclose what interest rates would be carried by the new debt, nor did it set a closing date for that offering.
It stated any additional dollars generated by the new debt not used to retire the other would be used for general corporate purposes, including repaying a portion of the borrowings outstanding under its senior secured credit facility.
Also on Monday, Laredo announced its 2019 production totals and year-end reserve estimates.
Officials stated the company, focused on producing crude oil from the Permian Basin, exceeded both its 2019 fourth-quarter and full-year guidance on both oil and total production.
Laredo’s fourth-quarter daily average of oil and equivalent production of 27,300 barrels and 84,000 barrels beat its previously issued guidance by 5% and 10%, respectively, they reported.
They also stated Laredo produced an average of 28,400 barrels of oil per day and 80,900 barrels of oil equivalent per day in 2019, representing increases of 2% and 19% compared to 2018 results.
They attributed the improvements to consistent operational efficiency gains that positively impacted cycle times and wider-spaced well packages that averaged 16% better production than historical rates on Upper/Middle Wolfcamp wells drilled on Laredo's established acreage.
On the reserves side, officials stated Laredo grew its proved oil reserves year over year by 17 million barrels, up 27%, and its proved total reserves by 55 million barrels to 293 million barrels of oil equivalent, an increase of 23%.
Additionally, officials stated that Laredo increased its proved undeveloped reserve estimates, primarily because of recent acquisitions it has made.
"The Company's strong performance in 2019 reflects the successful implementation of our returns and free cash flow generation focused strategy," Jason Pigott, Laredo’s CEO, stated as part of the release.
“Development in 2020 will shift to our recent Howard County acquisition."