Laredo Finalizes Broad Oak Acquisition
Laredo Petroleum has now completed the previously announced acquisition of Broad Oak.
The aggregate consideration paid was approximately $1 billion and consisted of approximately 2/3 of newly issued units of Laredo equity and 1/3 cash. The cash portion of the transaction was funded under Laredo's amended and restated $1 billion bank credit facility led by Wells Fargo Securities, LLC, BofA Merrill Lynch and J.P. Morgan Securities LLC, as joint lead arrangers. The amended and restated bank credit facility has an initial borrowing base of $650 million, of which $500 million was borrowed and outstanding following the closing of the acquisition.
This acquisition increases Laredo's size and positions it for continued growth in the oil-rich Permian Basin and the liquids-rich Granite Wash play. On a pro forma basis giving effect to the acquisition, Laredo has:
- total proved reserves of 840 Bcfe, consisting of 49 million barrels of crude oil and 547 Bcf of natural gas, as of March 31, 2011;
- average daily combined production of 130 MMcfe for the three months ended March 31, 2011, consisting of 40% crude oil and 60% natural gas plus associated natural gas liquids;
- a land position consisting of approximately 489,000 gross acres (338,000 net acres); and
- a total of 12 operated drilling rigs running, with eight drilling vertical wells and four drilling horizontal wells. Ten of these rigs are working in the Permian Basin and two in the Granite Wash play located in the Anadarko Basin.
The Broad Oak properties are concentrated on a contiguous land position located in the Permian Basin of West Texas primarily in Reagan County. This acreage is immediately south of, and on trend with Laredo's existing Permian Basin properties in Howard and Glasscock Counties. The combined acreage position in the Permian Basin consists of approximately 166,000 gross acres (126,000 net acres).
Randy Foutch, Laredo's Founder, Chairman and CEO said, "We welcome the Broad Oak employees to the Laredo team and intend to continue the active development and exploration of the combined company's attractive property base."
Tudor, Pickering, Holt & Co. Securities, Inc. served as financial advisor to Laredo. J.P. Morgan Securities LLC served as financial advisor to Broad Oak.
- Laredo To Sell Permian Pipeline Unit Stake For $825 Million (Oct 02)
- Laredo, EnerVest Agree to Anadarko Basin Transaction (May 22)
- Laredo Concludes Private Placement of Senior Notes (Oct 20)