![Laredo Petroleum Logo on a smartphone.](/sites/default/files/styles/hart_news_article_image_640/public/image/2022/12/shutterstock-1810451869.jpg?itok=bPPXUsqy)
Image of Laredo Petroleum Inc. Logo on a smartphone. (Source: Shutterstock)
Laredo Petroleum Inc. is touting its status as the first Permian operator to be awarded the Project Canary TrustWell Certification for responsibly sourced oil and natural gas production.
Operators that have been able to demonstrate their ability to produce low-emission or carbon-neutral hydrocarbons have been able to attract premium pricing in the U.S. and internationally.
In 2021, Occidental Petroleum Corp. was able to attract a premium price for its crude exports to India because it could demonstrate its oil was carbon neutral. Likewise, in 2017, Southwestern Energy Co. recorded the first public transaction of responsibly sourced gas to New Jersey Natural Gas at an extra cost.
Project Canary is a climate tech and environmental assessment group focused on providing ESG data for emission-intensive industries with partnerships with upstream oil and gas companies such as Southwestern, Denbury Inc., Chevron Corp. and private-equity firm Quantum Energy Partners.
Laredo has also announced plans to rebrand as Vital Energy effective Jan 9. They will trade on the NYSE under the ticker “VTLE.”
“Our rebrand to Vital Energy in early 2023 reflects our mission and collective commitment to find new and creative ways to add value for all of our stakeholders,” said president and CEO Jason Piggott.
On Dec. 1, Laredo Petroleum Inc. presented its 2022 ESG and Climate Risk Report with details on environmental targets for the new year and ESG progress made in 2022 compared to previous years.
In the report, the company laid out its goals for sustainable and responsible long-term production while continuing to meet higher demands each year. Its focus falls on building free cash flow, returning cash to shareholders, lowering debt and improving breakevens for development inventory, all while meeting emissions reduction targets.
Laredo’s report notes that its ESG goals have not adversely affected its breakeven cost, which it said was $43/bbl. That cost is “well below the median expected price of crude oil across six different net zero scenarios …thereby demonstrating the resilience of our near-term development plans through 2030.”
The company said it continued to make progress on emissions targets in 2021 and is adding a new 2030 emissions goal as well as a new water conservation goal, according to the report.
Laredo’s environmental targets include zero routine flaring by 2025, 50% recycled water for completions operations by 2025, less than 0.20% methane emissions by 2025, less than 12.5 MTCO2e/Mboe Scope 1 greenhouse-gas (GHG) emissions intensity by 2025 and a combined Scope 1 and 2 GHG emissions intensity target of less than 10 MTCO2e/Mboe by 2030.
Since 2019, Laredo Petroleum has seen a 62% reduction in flaring, 34% reduction in Scope 1 GHG emissions intensity and 63% reduction in methane intensity, according to the report.
In the past two years, ESG metrics were tied to Laredo’s executive compensation program, including adding emissions reduction goals for 2025 to their long-term incentives. Additionally, environmental goals, including testing and implementing new technologies, enhancing emissions monitoring capabilities, expanding electrification of field operations and replacing pneumatic devices now make up 20% of their short-term goals.
The company also increased board gender and ethnic diversity to 60%, a 20% increase since 2019 and expanded its task force on climate-related financial disclosures (TCFD)-aligned scenario analysis to include 1.5 C and net zero scenarios.
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