Closely following a significant $125 million acquisition in the Midland Basin area, Tulsa-based Laredo Petroleum, Inc. announced that the company is partnering with Credit Suisse Securities (USA) LLC for a stock offering expected to net $136.3 million.
According to Laredo’s Form 8-K filed with the U.S. Securities and Exchange Commission on July 18, 2016, the company is offering 13 million shares of the common stock with a par value of $0.01 per share at a purchase price of $10.513 per share with an option to purchase an additional 1,950,000 shares on the same terms. The offering will close on July 19, 2016.
Laredo intends to use the net proceeds to repay its senior secured debts and to fund the Midland Basin asset acquisition, according to the company’s press release.
On July 14, 2016, Laredo signed a purchase agreement for additional acreage within the Company’s existing footprint in the Midland Basin for $125 million.
The purchase covers additional rights to the Spraberry interval, enables the drilling of additional 10,000-foot or longer locations, facilitates the new Western Glasscock production corridor and increases the Company’s working interest in western Glasscock and Reagan Counties, Texas.
The acquisition adds approximately 9,200 net acres, of which approximately 6,300 are in the Spraberry interval and approximately 2,900 net acres are in the Spraberry, Upper, Middle and Lower Wolfcamp, Canyon and Cline zones, according to a Laredo press release.
