Permian Producer Laredo Petroleum Strikes $715 Million Deal for Sabalo, Partner

In addition to the Sabalo deal, Laredo Petroleum also agreed to a partial sale of operated PDP reserves in gas-weighted legacy assets in Reagan and Glasscock counties, Texas, for $405 million.

Permian Producer Laredo Petroleum Strikes $715 Million Deal for Sabalo, Partner

As a result of the transactions, Laredo Petroleum will have more than 30,000 highly productive, contiguous net acres in Howard County, Texas, and a near-term pathway to increasing its oil cut to more than 50% from the current 30%, says CEO Jason Pigott. (Source: Shutterstock.com)

Laredo Petroleum Inc. announced over $1 billion worth of transactions on May 9, which the Tulsa, Okla.-based independent says accelerates its strategic ambitions in the Permian Basin.

In a company release, Laredo said it had signed an agreement to acquire the assets of Sabalo Energy LLC, a portfolio company of EnCap Investments LP, and a nonoperating partner for approximately $715 million in cash and stock. Additionally, the company announced the partial sale of operated PDP reserves in gas-weighted legacy assets in Reagan and Glasscock counties, Texas, to an affiliate of Sixth Street Partners LLC.

Laredo expects the $405 million of proceeds from the sale to partially fund its acquisition, which includes roughly 21,000 contiguous net acres directly offsetting Laredo’s existing Howard County leasehold in the Midland Basin of West Texas.

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Emily Patsy

Emily Patsy is the senior managing editor for Hart Energy’s Digital News Group. She's responsible for the daily news flow and also manages the A&D Watch and Energy Pulse weekly newsletters.