Laredo Finalizes Broad Oak Acquisition

- Laredo Finalizes Broad Oak Acquisition

Wednesday, July 06, 2011
Laredo Petroleum Inc.

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.

Oil & Gas Post

Promote Your Page Too
LINK

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.

Oil & Gas Post

Promote Your Page Too