Laredo Petroleum (LPI) saw its stock price drop a steep 9% after the company reported its third quarter results last Thursday. The major factor behind the market's negative reaction was the lower than expected production volumes driven by a confluence of several operating mishaps during the quarter. The operating issues will also impact the fourth quarter volumes, with Q4 production now expected at the low end of the previously guided range.
The operating problems during the quarter are transitory in nature, with the production volumes being effectively deferred into the first quarter of 2014. However, the mechanical difficulties that Laredo encountered while drilling and completing two of its recent wells demonstrate that executing long-lateral wells in the...
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