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Sep 30, 2020
Vital Energy Q3 2020 Earnings Report
Laredo Petroleum announced its third-quarter 2020 results, reporting a net loss attributable to common stockholders of $237.4 million, or $20.32 per diluted share, and adjusted net income of $47.0 million, or $4.02 per adjusted diluted share.
Key Takeaways
Laredo Petroleum reported a net loss of $237.4 million, or $20.32 per diluted share, but generated $71 million in free cash flow and reduced net debt by $64 million. The company also increased its fourth-quarter and full-year 2020 oil and total production guidance while maintaining its full-year capital expenditure guidance.
Generated Free Cash Flow of $71 million and reduced net debt by $64 million during third-quarter 2020
Received $58.2 million from settlements of matured/terminated commodity derivatives, resulting in an average hedged sales price of $22.76 per barrel of oil equivalent, a 39% increase versus an average unhedged sales price of $16.39 per BOE in the same period
Added 6,800 barrels of oil per day of 2021 oil hedges at a weighted-average swap price of $45.55 Brent, increasing 2021 oil hedges to 22,150 BOPD, equivalent to 80% of anticipated 2021 oil production
Lowered lease operating expenses to $2.45 per BOE, an 18% decrease from third-quarter 2019
Revenue by Segment
Forward Guidance
Laredo Petroleum increased its fourth-quarter and full-year guidance for total and oil production for 2020. The increase in total production guidance for fourth-quarter and full-year 2020 reflects the continued outperformance versus expectations of natural gas production on the Company's established acreage position.
Positive Outlook
- Total production for 4Q-20 is expected to be 82.0 - 84.0 MBOE per day.
- Total production for FY-20 is expected to be 87.6 - 88.1 MBOE per day.
- Oil production for 4Q-20 is expected to be 21.0 - 23.0 MBOPD.
- Oil production for FY-20 is expected to be 26.6 - 27.1 MBOPD.
- Average oil sales price realization (% of WTI) is expected to be 95%.
Challenges Ahead
- Net income (expense) of purchased oil is expected to be ($4.3) MM.
- Lease operating expenses are expected to be $2.80/BOE.
- Production and ad valorem taxes are expected to be 7.25% of oil, NGL and natural gas sales revenues.
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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