Privately held Laredo Petroleum Inc. has entered a definitive agreement to buy Broad Oak for roughly $1 billion. Broad Oak will become a wholly-owned subsidiary of Laredo. Both companies are were formed in partnership with their management teams by affiliates of Warburg Pincus LLC.

Tulsa, Okla.-based Laredo Petroleum ranked No. 35 in the April OGFJ100P listing. Dallas-based Broad Oak came in at No. 49 in the January OGFJ100P listing.

The $1 billion aggregate purchase price will consist primarily of newly issued units of Laredo. As part of the transaction, Laredo will pay off Broad Oak's bank debt with funds from a revised $1 billion credit facility. The facility will have an initial borrowing base of $650 million fully underwritten by Wells Fargo and BofA Merrill Lynch as Joint Lead Arrangers. 

In a statement, Laredo Petroleum founder and CEO Randy Foutch said the transaction serves to increase the scale of the company while deleveraging its balance sheet and adding incremental liquidity. The company also has its sights set on the Wolfberry play. 

John Coss, president of Broad Oak Energy, commented: "We've built this great team at Broad Oak and were an early mover in identifying the unconventional potential of the extended Wolfberry play."

The transaction is expected to close at the beginning of July and is subject to customary closing conditions.

Tudor, Pickering, Holt & Co. Securities, Inc. served as financial advisor to Laredo Petroleum and rendered a fairness opinion to the Board of Directors of Laredo. JP Morgan Securities LLC served as financial advisor to Broad Oak and rendered a fairness option to the Board of Directors of Broad Oak.