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Jun 30, 2020
Vital Energy Q2 2020 Earnings Report
Laredo Petroleum's financial and operating results were announced for Q2 2020.
Key Takeaways
Laredo Petroleum reported a net loss attributable to common stockholders of $545.5 million, or $46.75 per diluted share, for the second quarter of 2020. Adjusted Net Income was $28.4 million, or $2.43 per adjusted diluted share, and Adjusted EBITDA was $132.8 million.
Received $86.9 million from settlements of matured commodity derivatives, resulting in an average hedged sales price of $21.09 per barrel of oil equivalent.
Reduced unit lease operating expenses (LOE) to $2.40 per BOE, a 24% decrease from the second quarter of 2019.
Reduced unit general and administrative expenses (G&A) to $1.24 per BOE, a 16% decrease from the second quarter of 2019.
Produced an average of 31,241 barrels of oil per day (BOPD), an increase of 3% from the second quarter of 2019.
Revenue by Segment
Forward Guidance
Laredo now anticipates capital expenditures for full-year 2020 to be $340 - $350 million and to operate within cash flow, excluding non-budgeted acquisitions. At current service costs and commodity prices, the Company plans to return to a normalized operational cadence of two rigs and one completions crew at the beginning of 2021. Planned activity in 2021 will be focused on the Company's oily, high-return Howard County acreage, with 50 - 55 completions anticipated in 2021. Laredo expects this 2021 activity to be accomplished with total capital expenditures of $325 - $350 million and to generate full-year 2021 oil production of 27.0 - 29.0 MBOPD.
Positive Outlook
- Resume development activities and begin completions operations later in the third quarter.
- Maintain a stable drilling and completions cadence in 2021.
- Operate within cash flow and securing those cash flows with a consistent hedging program.
- Steady completions activity in Howard County, combined with increased commodity prices and hedges in 2021, supports an estimated $120 million in additional cash flow in 2021 and should return our oil production to full-year 2019 levels.
- Focus is on strengthening our balance sheet as we evaluate acquisition and deleveraging opportunities and improving our debt-to-equity ratio.
Challenges Ahead
Revenue & Expenses
Visualization of income flow from segment revenue to net income
Historical Earnings Impact
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Avg. Return Before/After Earnings
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