Laredo Petroleum, Inc. (LPI) Stock Analysis

Laredo Petroleum, Inc. (LPI) Energy Operations & Outlook

Laredo Petroleum, Inc. focuses on oil and natural gas exploration and production within the Permian Basin. With 166,064 net acres, the company extracts and sells oil, natural gas liquids, and natural gas. Laredo Petroleum navigates the competitive energy landscape while managing its proved undeveloped reserves.

What Is the Investment Thesis for LPI?

Laredo Petroleum, Inc. presents a complex investment case within the energy sector. The company's focus on the Permian Basin provides exposure to a key oil and gas producing region. However, its negative profit margin of -69.3% raises concerns about operational efficiency and profitability. The company's strategy to maximize production from its 166,064 net acres in the Permian Basin could drive revenue growth, but this is contingent on favorable commodity prices. The absence of a dividend may deter income-focused investors. Key catalysts include potential increases in oil and gas prices and successful development of its proved undeveloped reserves of 86,592 thousand barrels of oil equivalent. Potential risks include commodity price volatility, operational challenges, and environmental regulations. Investors should closely monitor the company's ability to improve profitability and manage its debt levels.

Based on FMP financials and quantitative analysis

LPI Key Highlights

Laredo Petroleum focuses on the Permian Basin, holding 166,064 net acres as of December 31, 2021.

• The company's total proved undeveloped reserves were 86,592 thousand barrels of oil equivalent as of December 31, 2021.
• Laredo Petroleum operates with 273 employees.
• The company's gross margin is 44.2%.
• Laredo Petroleum does not offer a dividend.

Who Are LPI's Competitors?

LPI is benchmarked below against 8 industry peers on price, market cap, and our AI MoonshotScore.

AI Score by Stock Expert AI · Price data: FMP / Yahoo Finance

What Are LPI's Key Strengths?

Significant acreage in the Permian Basin.

• Proved undeveloped reserves provide future production potential.
• Experienced management team.
• Established infrastructure for production and transportation.

What Are LPI's Weaknesses?

Negative profit margin.

• Exposure to commodity price volatility.
• High debt levels.
• Dependence on a single geographic region (Permian Basin).

What Could Drive LPI Stock Higher?

Potential increase in oil and natural gas prices could improve profitability.

• Successful development of proved undeveloped reserves could increase production and revenue.
• Cost reduction initiatives could improve profit margins.
• Strategic acquisitions could expand the company's asset base.

What Are the Key Risks for LPI?

Negative return on equity (-56.9%) — the business is not currently generating profit on shareholder capital.

• Inconsistent delivery — missed Wall Street EPS estimates in 4 of the last 8 reported quarters.
• Commodity price volatility could negatively impact revenue and profitability.
• Increased environmental regulations could increase operating costs.
• Operational challenges in the Permian Basin could disrupt production.
• High debt levels could limit financial flexibility.
• Competition from other producers could erode market share.

What Are the Growth Opportunities for LPI?

• Increased Production Efficiency: Laredo Petroleum can enhance its profitability by improving operational efficiency in its Permian Basin assets. Implementing advanced drilling and completion techniques can lead to higher production rates and lower costs per barrel of oil equivalent. This involves optimizing well spacing, utilizing enhanced oil recovery methods, and leveraging data analytics to improve reservoir management. Successfully increasing production efficiency can directly improve the company's bottom line and strengthen its competitive position within the Permian Basin.
• Strategic Acquisitions: Laredo Petroleum can expand its asset base and production capacity through strategic acquisitions of complementary properties in the Permian Basin. Acquiring additional acreage or producing assets can increase the company's scale and diversify its production mix. Identifying undervalued assets and integrating them effectively into its existing operations can create synergies and enhance overall value. This strategy requires careful due diligence and financial discipline to ensure that acquisitions are accretive to earnings and contribute to long-term growth.
• Commodity Price Hedging: Laredo Petroleum can mitigate the impact of commodity price volatility by implementing a robust hedging program. Hedging involves using financial instruments, such as futures contracts and options, to lock in prices for future production. This provides greater revenue certainty and protects the company's cash flow from unexpected price declines. A well-designed hedging strategy can also provide a competitive advantage by allowing the company to invest in growth projects with greater confidence.
• Infrastructure Development: Investing in infrastructure development within the Permian Basin can alleviate bottlenecks and improve access to markets for Laredo Petroleum's production. This includes building or expanding pipelines, storage facilities, and processing plants. Improved infrastructure can reduce transportation costs, increase production capacity, and enhance the company's ability to capitalize on favorable market conditions. Collaborating with other producers and midstream companies on infrastructure projects can also spread the costs and risks associated with these investments.
• ESG Initiatives: Laredo Petroleum can enhance its long-term sustainability and attract environmentally conscious investors by implementing robust Environmental, Social, and Governance (ESG) initiatives. This includes reducing greenhouse gas emissions, minimizing water usage, and promoting responsible waste management practices. Transparent reporting on ESG performance and engagement with stakeholders can improve the company's reputation and access to capital. Embracing sustainable practices can also lead to cost savings and operational efficiencies, further enhancing the company's financial performance.

What Are LPI's Competitive Advantages?

• Strategic land position in the Permian Basin.
• Expertise in unconventional oil and gas extraction techniques.
• Established infrastructure for transporting and processing production.

What Does LPI Do?

Laredo Petroleum, Inc. is an independent energy company specializing in the exploration, development, and production of oil and natural gas. Incorporated in 2006 and headquartered in Tulsa, Oklahoma, the company has strategically focused its operations within the Permian Basin of West Texas. Laredo Petroleum was initially known as Laredo Petroleum Holdings, Inc., before rebranding in December 2013 to reflect its core business activities more directly. The company's primary activities include acquiring and developing oil and natural gas properties, extracting resources, and selling these commodities. As of December 31, 2021, Laredo Petroleum had assembled a significant land position of 166,064 net acres in the Permian Basin, underlining its commitment to this prolific hydrocarbon region. The company's asset base includes total proved undeveloped reserves of 86,592 thousand barrels of oil equivalent, representing a substantial inventory for future production. Laredo Petroleum's revenue streams are derived from the sale of oil, natural gas liquids, and natural gas, making it susceptible to commodity price volatility and market dynamics within the energy sector. The company manages its operations with a workforce of 273 employees.

What Products and Services Does LPI Offer?

• Acquires oil and natural gas properties in the Permian Basin of West Texas.
• Explores for oil and natural gas reserves.
• Develops oil and natural gas properties to maximize production.
• Extracts oil, natural gas liquids, and natural gas from its properties.
• Sells the extracted oil, natural gas liquids, and natural gas to various customers.
• Manages its proved undeveloped reserves to optimize future production.

How Does LPI Make Money?

• Acquires and develops oil and gas properties.
• Extracts and processes oil, natural gas liquids, and natural gas.
• Generates revenue through the sale of these commodities.

What Industry Does LPI Operate In?

Laredo Petroleum operates within the highly competitive oil and gas exploration and production industry. The industry is characterized by fluctuating commodity prices, technological advancements in extraction techniques, and increasing environmental scrutiny. Companies like Laredo Petroleum face pressure to optimize production costs, manage environmental impact, and adapt to evolving energy policies. The Permian Basin, where Laredo Petroleum focuses its operations, is a key production area, but faces infrastructure constraints and competition from other producers. The industry is also seeing a shift towards sustainable energy practices, which could impact long-term demand for fossil fuels.

Who Are LPI's Key Customers?

• Refineries that process crude oil.
• Natural gas distributors that supply gas to residential and commercial customers.
• Petrochemical companies that use natural gas liquids as feedstock.

Return on equity for Laredo Petroleum, Inc. stands at -56.9%, a gauge of how efficiently it converts shareholder capital into profit. Return on assets is -27.9%, showing how much profit it generates from its asset base. Its free cash flow yield is 17.9%, a gauge of the cash the business throws off relative to its market value. A current ratio of 0.78 means current liabilities exceed short-term assets, a liquidity point worth watching. Its earnings yield is -194.0%, the inverse of the P/E and a quick read on earnings relative to price.

LPI Revenue & Earnings Trend

In Sep 2025, LPI generated $420.8M in top-line revenue, marking a sequential decrease of 2.0%. The company recorded a net loss of $353.5M, with diluted EPS of $-9.35. Revenue has contracted over three consecutive quarters, which investors in this unknown Energy stock should monitor closely. Across the four most recent quarters, LPI averaged $-11.46 in diluted EPS.

Company Profile

Laredo Petroleum, Inc. operates in the Oil & Gas Exploration & Production industry within the Energy sector. It is headquartered in Tulsa, US. The company is led by CEO Mikell Jason Pigott. LPI has traded publicly since 2011.

Laredo Petroleum, Inc. has missed Wall Street's EPS estimate in 4 of its last 8 reported quarters — a mixed record worth weighing. Reported results have landed about 10.6% above estimates on average.

The most recent 11 insider filings for Laredo Petroleum, Inc. break down as 2 sales and 9 purchases. On net that is roughly 2.0M shares acquired (about $61K) — insiders putting money in tends to read as conviction.

LPI Financials

LPI Latest News

Laredo Petroleum, Inc. Energy Stock: Key Questions Answered

Disclaimer: This content is for informational purposes only and does not constitute investment advice. Always do your own research and consult a financial advisor.

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