Laredo Petroleum, exploration and production company headquartered in Tulsa, Oklahoma, announced this Thursday it completed the acquisition of previously announced assets from Sabalo Energy.
Firstly, the assets acquired were the oil-weighted Howard County leasehold of Sabalo energy; which is a portfolio company of EnCap Investments L.P., and a non-operating partner of Laredo Petroleum.
Secondly, to the acquisition followed a divest of certain legacy gas-weighted proved developed producing reserves; to an affiliate of Sixth Street Partners, LLC.
Thirdly, Laredo Petroleum also announced the results of its “at-the-market” offering program. Fir this matter, the company sold 714,526 shares; at an average price of $65.70 for net proceeds of $45.8 million.
Consequently, the company now has 16.1 million total shares outstanding as of July 1, 2021; including shares issued in connection with the closing of the Sabalo acquisition.
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Laredo Petroleum leveraging from acquisition strategy
Moreover, the acquisition of the assets became effective in July 1st; the company paid Sabalo Energy aggregate consideration of $606 million in cash and 2.507 million shares of Laredo’s common stock.
On the other hand, for the sale of proved developed reserves to Sixth Street, Laredo received $405 million in cash; which are subject to customary adjustments, and may receive additional potential cash flow based on earn-out payments over the next six years.
Furthermore, after the closing of the sale and the acquisition, Laredo Petroleum secured credit facility; the borrowing base got at $725 million, with both Laredo’s elected commitment and lender commitments set at $725 million.
According to the company’s statement, as of July 1, 2021, Laredo also has outstanding borrowings of $380 million; on its senior secured credit facility, resulting in available capacity; after the reduction for outstanding letters of credit, of $301 million. Including cash and cash equivalents of $54 million, total liquidity is $355 million.
On the other hand, Jason Pigott, Laredo Petroleum CEO, said. “The closing of these transformative transactions marks the transition of Laredo into a very different Company; than it was two years ago. Finally, he remarked. “ Also, our disciplined acquisition strategy has dramatically improved our expected capital efficiency and Free Cash Flow generation capability.”
