Laredo Petroleum cuts budget by 36%, plans one-rig Howard County program

Laredo Petroleum Inc., Tulsa, has reduced its 2020 capital budget by 36% to $290 million from $450 million due to the decline in oil and natural gas prices.

The company is “moving quickly to stop most of our drilling and completions operations for the remainder of 2020,” said Jason Pigott, president and chief executive officer. The company expects to drop its one contracted completions crew in early May and to suspend completions activity for the remainder of 2020. Operated rigs will drop to one from four by June with one rig expected to run for remainder of the year in Howard County, Tex. To preserve the assets most recently acquired in the county for $130 million, the company will not complete any wells during 2020 but plans instead to build a DUC inventory. Previously, as part of its transition to the county, the company planned a four-rigs program by April with completions previously estimated to begin in the year’s second quarter. The first of a previously planned 15-well package has been drilled.

Oil production for full-year 2020 is expected to decline 8% versus full-year 2019 and total production is expected to remain flat.

Additional details on full-year 2020 operational plans are expected to be released with its first-quarter 2020 earnings release.