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.
Recommended Reading
Kimmeridge Fast Forwards on SilverBow with Takeover Bid
2024-03-13 - Investment firm Kimmeridge Energy Management, which first asked for additional SilverBow Resources board seats, has followed up with a buyout offer. A deal would make a nearly 1 Bcfe/d Eagle Ford pureplay.
Laredo Oil Subsidiary, Erehwon Enter Into Drilling Agreement with Texakoma
2024-03-14 - The agreement with Lustre Oil and Erehwon Oil & Gas would allow Texakoma to participate in the development of 7,375 net acres of mineral rights in Valley County, Montana.
NOV's AI, Edge Offerings Find Traction—Despite Crowded Field
2024-02-02 - NOV’s CEO Clay Williams is bullish on the company’s digital future, highlighting value-driven adoption of tech by customers.
Todd Holdco to Invest Further into Northcliff Resources
2024-01-24 - Todd Holdco will acquire 37,333,333 common shares in Northcliff at CA$0.01875 (US$ 0.014) per common share.
Hess Corp. Boosts Bakken Output, Drilling Ahead of Chevron Merger
2024-01-31 - Hess Corp. increased its drilling activity and output from the Bakken play of North Dakota during the fourth quarter, the E&P reported in its latest earnings.