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Discounted Cash Flow (DCF) Analysis Unlevered


Laredo Petroleum Inc.

Laredo Petroleum Inc. (LPI)

Energy

Operating Data

Year
A/P
2013
Actual
2014
Actual
2015
Actual
2016
Actual
2017
Actual
2018
Actual
2019
Projected
2020
Projected
2021
Projected
2022
Projected
2023
Projected
Revenue 665.26793.92606.63597.35822.131,105.771,252.511,418.711,606.981,820.222,061.77
Revenue (%)
EBITDA 527.42797.49-2,005.95-19.12798.54599.44-5.89-6.67-7.55-8.56-9.69
EBITDA (%)
EBIT 292.85550.98-2,283.67-167.44640.11386.80-372.12-421.50-477.43-540.79-612.55
EBIT (%)
Depreciation 234.57246.51277.72148.32158.43212.64366.23414.83469.88532.23602.86
Depreciation (%)

Balance Sheet Data

Year
A/P
2013
Actual
2014
Actual
2015
Actual
2016
Actual
2017
Actual
2018
Actual
2019
Projected
2020
Projected
2021
Projected
2022
Projected
2023
Projected
Total Cash 198.1829.3031.1832.68112.1445.12129.01146.13165.52187.48212.36
Total Cash (%)
Account Receivables 77.30126.9587.7286.85100.6394.32161.57183.01207.30234.81265.97
Account Receivables (%)
Inventories -----------
Inventories (%)
Accounts Payable 19.4938.9814.2052.2158.3769.5567.3876.3386.4697.93110.92
Accounts Payable (%)
Capital Expenditure -302.16-1,291.23-532.20-489.53-481.85-685.80-1,040.33-1,178.38-1,334.76-1,511.88-1,712.50
Capital Expenditure (%)

Weighted Average Cost Of Capital

Share price $ 2.7
Diluted Shares Outstanding 232.34
Cost of Debt
Tax Rate 1.29
After-tax Cost of Debt -0.01
Risk-Free Rate
Market Risk Premium
Cost of Equity 14.38
Total Debt 983.64
Total Equity 627.32
Total Capital 1,610.95
Debt Weighting 61.06
Equity Weighting 38.94
Wacc

Build Up Free Cash

Year
A/P
2013
Actual
2014
Actual
2015
Actual
2016
Actual
2017
Actual
2018
Actual
2019
Projected
2020
Projected
2021
Projected
2022
Projected
2023
Projected
Revenue 665.26793.92606.63597.35822.131,105.771,252.511,418.711,606.981,820.222,061.77
EBITDA 527.42797.49-2,005.95-19.12798.54599.44-5.89-6.67-7.55-8.56-9.69
EBIT 292.85550.98-2,283.67-167.44640.11386.80-372.12-421.50-477.43-540.79-612.55
Tax Rate 38.70%38.22%7.41%0.00%0.33%1.29%14.33%14.33%14.33%14.33%14.33%
EBIAT 179.50340.40-2,114.37-167.44638.02381.80-318.81-361.12-409.04-463.32-524.80
Depreciation 234.57246.51277.72148.32158.43212.64366.23414.83469.88532.23602.86
Accounts Receivable --49.6439.230.86-13.776.31-67.25-21.44-24.29-27.51-31.16
Inventories -----------
Accounts Payable -19.49-24.7938.016.1611.18-2.178.9410.1311.4713.00
Capital Expenditure -989.07-759.03-42.67-7.68203.95354.53138.05156.37177.12200.63
UFCF 414.071,545.83-2,581.24-22.91781.16815.87332.54179.27203.06230.00260.52
WACC
PV UFCF 306.17151.97158.49165.29172.38
SUM PV UFCF 1,255.83

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%) 8.61
Free cash flow (t + 1) 270.94
Terminal Value 5,877.33
Present Value of Terminal Value 3,888.94

Intrinsic Value

Enterprise Value 5,144.77
Net Debt 938.52
Equity Value 4,206.25
Shares Outstanding 232.34
Equity Value Per Share 18.10