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BRIEF-Laredo Petroleum Announces Transformative Transactions

05/09/2021 18:13
BRIEF-Laredo Petroleum Announces Transformative Transactions

- Laredo Petroleum Inc LPI.N:

  • LAREDO PETROLEUM ANNOUNCES TRANSFORMATIVE TRANSACTIONS

  • LAREDO PETROLEUM- SIGNING OF AGREEMENT TO ACQUIRE ASSETS OF SABALO ENERGY, A PORTFOLIO COMPANY OF ENCAP, AND A NON-OPERATING PARTNER FOR $715 MILLION

  • DEAL VALUE COMPRISED OF $625 MILLION IN CASH AND APPROXIMATELY 2.5 MILLION SHARES OF LAREDO COMMON EQUITY

  • LAREDO- COMPANY ANNOUNCED SALE OF 37.5% OF ITS OPERATED PDP RESERVES IN LEGACY TO AFFILIATE OF SIXTH STREET FOR PROCEEDS OF $405 MILLION

  • LAREDO PETROLEUM- NONE OF PDP RESERVES ARE LOCATED IN HOWARD OR WESTERN GLASSCOCK COUNTIES; BOTH TRANSACTIONS ARE EXPECTED TO CLOSE JULY 1, 2021.

  • COMBINED TRANSACTIONS EXPECTED TO BE ACCRETIVE TO LONG-TERM FREE CASH FLOW AND ADJUSTED EBITDA PER SHARE

  • LAREDO PETROLEUM- TRANSFORMS CASH GENERATION PROFILE OF CO, EXPECTED TO DRIVE TOTAL FREE CASH FLOW THROUGH FY-25 OF >$700 MILLION AT CURRENT STRIP PRICES

  • LAREDO - ANTICIPATED DELEVERAGING BEGINNING IN SECOND HALF OF 2021, WITH NET DEBT/TTM ADJUSTED EBITDA 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

  • SENIOR SECURED CREDIT FACILITY BORROWING BASE REAFFIRMED AT $725 MILLION NON-GAAP FINANCIAL MEASURE

  • LAREDO- CITIGROUP, HOULIHAN LOKEY PROVIDED ADVISORY SERVICES ON SABALO ACQUISITION; HOULIHAN LOKEY WAS FINANCIAL ADVISOR ON PDP SALE TO SIXTH STREET

  • JEFFERIES ACTED AS EXCLUSIVE FINANCIAL ADVISOR TO SABALO

Source text for Eikon: ID:nGNX1D1sWw

Further company coverage: LPI.N


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