Laredo to Buy Broad Oak for $1B

- Laredo to Buy Broad Oak for $1B

Thursday, June 16, 2011
Laredo Petroleum Inc.

Laredo and Broad Oak have entered into definitive agreements whereby Broad Oak will become a wholly-owned subsidiary of Laredo in exchange for aggregate consideration of approximately $1 billion.

This aggregate consideration will consist primarily of newly issued units of Laredo. As part of the transaction, Laredo will also pay off the existing Broad Oak bank indebtedness with funds from a revised $1B credit facility. This facility will have an initial borrowing base of $650 million fully underwritten by Wells Fargo and BofA Merrill Lynch as Joint Lead Arrangers. Both Laredo and Broad Oak are privately held companies formed in partnership with their management teams by affiliates of Warburg Pincus LLC.

"Broad Oak is a great company with an impressive track record of success. David Braddock, John Coss, Robert Skinner, Jim Sherrill and their team have don an excellent job building the company and we are excited about the opportunity to combine our technical knowledge and exploitation efforts in the Wolfberry play," said Randy Foutch, Founder and Chief Executive Officer of Laredo Petroleum. "This transaction is a significant event for Laredo, as it meaningfully increases our scale while also deleveraging our balance sheet and adding incremental liquidity."

David Braddock, Founder and Chief Executive Officer of Broad Oak Energy, commented, "This transaction represents a successful outcome for the senior management, employees and shareholders of the company. I am confident that under the ongoing leadership of Randy Foutch and his team, the assets we developed at Broad Oak will continue to create significant value for both Laredo and Broad Oak stakeholders."

"We've built this great team at Broad Oak and were an early mover in identifying the unconventional potential of the extended Wolfberry play," added John Coss, President of Broad Oak Energy. "I'm looking forward to watching the play continue to evolve as Broad Oak joins forces with Laredo."

The transaction is expected to close at the beginning of July and is subject to customary closing conditions.

Tudor, Pickering, Holt & Co. Securities, Inc. served as financial advisor to Laredo Petroleum and rendered a fairness opinion to the Board of Directors of Laredo. J.P. Morgan Securities LLC served as financial advisor to Broad Oak and rendered a fainress option to the Board of Directors of Broad Oak.

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