Laredo Petroleum Inc. (NYSE: LPI) reported Jan. 17 that its $530 million 2017 capital budget was approved by the board of directors.

The budget, which includes $450 million for drilling and completions and about $80 million for production facilities and other costs including land, does not include potential Medallion-Midland Basin pipeline system investments.

Laredo plans to operate four horizontal rigs in 2017 and plans to drill and complete about 70 horizontal wells with roughly 95% average working interest.

About 85% of drilling activity will target the Upper and Middle Wolfcamp zones, with the remainder targeting the Lower Spraberry and Cline zones. This activity could generate total production growth of more than 15% vs. full-year 2016 volumes, the company said.

All the wells will be drilled as multiwell packages with an average of four or five wells per package. Developing wells in larger packages will allow Laredo to minimize the impact of current drilling on future development plans by mitigating pressure depletion and frack impact, the company said.

Capital costs for Upper and Middle Wolfcamp wells drilled on multiwell pads will likely be about $6.4 million for a 10,000-ft lateral completed with 1,800 pounds of sand per ft.

Internally generated cash flows and senior secured credit facility borrowings will fund the budget, the company said.

The company noted that it plans to close the roughly-$60 million sale of about 2,900 net acres on Jan. 17.

On Jan. 16, Tulsa, Okla.-based Laredo hedged about 6.85 million barrels of oil at a weighted-average floor price of $55.82 per barrel.