Tulsa’s Laredo Petroleum reported fourth quarter 2018 net income of $149.6 million or 65 cents a share. It also stated its net income for all of 2018 totaled $325 million which translated to $1.39 per diluted share.
Laredo’s production averaged 68,168 barrels of oil equivalent a day during 2018 which was a 17% increase over all of 2017 production. The value of its proved reserves increased 17% over 2017.
The company completed 18 gross horizontal wells in the fourth quarter of 2018 with an average completed lateral length of nearly 10,100. Company management credited efficiency improvements resulting in the completion of 74 horizontal wells in all of 2018.
“The Company’s 2018 drilling program generated significant data on well spacing, furthering our subsurface understanding and driving a key strategic shift in our development plan,” stated Randy A. Foutch, Chairman and Chief Executive Officer. “The resulting 2019 capital program is expected to produce a returns and capital efficiency inflection point for the Company, while also generating high-single digit production growth within operating cash flow. ”
Foutch said the company has already taken action addressing the reduced oil productivity seen in 2018 he believes was affected by the tighter space of some wells drilled in 2017 and last year.
Responding to these results, the Company began
widening spacing on wells spud in the first quarter of 2019. Laredo expects this shift in development strategy to
drive higher returns and increased capital efficiency versus 2018 as widening spacing is anticipated to address one
of the causes of higher oil decline rates.