You are given a text that consists of multiple sentences. Your task is to perform abstractive summarization on this text. Use your understanding of the content to express the main ideas and crucial details in a shorter, coherent, and natural sounding text. 
Text: These statements, including those describing our beliefs, goals, expectations, forecast and assumptions, are intended to be covered by the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.
We performed exceptionally well in 2021 safely navigating the second year of a global pandemic, capturing important acquisitions that extended our inventory life, and making great strides to improve our balance sheet.
Our results were quite strong, and our strategy to create future value for our shareholders is well defined and on track.
Our fourth quarter 2021 results were outstanding.
Both total and oil production are above the top end of guidance.
We generated $25 million of free cash flow and adjusted EBITDA of $182 million.
During full year 2021, first, we materially increased our runway of high return oil way to drilling locations.
We were able to identify and capture two significant acquisitions that fit as perfectly, adding more than 40,000 acres in Howard and Western Glasscock counties.
These deals were accretive to shareholders and de-leveraging.
These deals initially added about 250 locations, but importantly, recent drilling success has added an additional 125 locations across areas where we ascribe no value at the time of the acquisition.
We now have eight years of oil weighted high margin inventory in Howard and Western Glasscock counties.
Second, we grew improved oil reserves by nearly 80%, and oil now makes up nearly 40% of our total reserves.
The benefits of increased oil reserves paired with the sale of lower margin gas-weighted assets is apparent in our margins and a 260% increase in the SEC PV-10 value.
Added WTI price of $75 more reflective of the current environment, we estimate our reserve value would increase by almost $1 billion from the SEC PV-10 to approximately $4.6 billion.
Third, we significantly improved our capital structure, the reduction of leverage and increased liquidity.
We issued $400 million of senior notes at an attractive rate and raised $73 million with the issuance of common stock through our ATM program.
Our investments have been disciplined, allowing us to reduce our 4Q annualized net debt to adjusted EBITDA ratio to 1.9 times at year-end 2021, compared to a 2.4 times a year ago.
Lastly, we continue to demonstrate our commitment to ESG and issued comprehensive ESG and climate risk report with data through year-end in 2020.
We established meaningful targets to reduce greenhouse gas and methane emissions, as well as the elimination of routine flaring by 2025.
We understand shareholder expectations for our industry and our board management team and other employees are committed to leading the way.
We aligned the board oversight responsibilities for ESG, and appointed a chief sustainability officer reporting directly to me.
Additionally, we included EEO-1 data in our 2021 ESG report providing clarity into the diversity of our workforce.
Our 2021 achievements provide a strong foundation for 2022.
Yesterday, we issued our outlook for this year, which aligns with our focus on capital efficient investments, the generation of free cash flow, and the continued strengthening of our balance sheet.
Our leverage reduction is six months ahead of previous expectations of year-end 2022, benefiting from higher commodity prices.
We are quickly moving toward a time when we will be able to return significant cash to shareholders.
We are excited about 2022, and the financial and operating opportunities that we see in front of us.
We expect to generate about $300 million in free cash flow in 2022 of the current commodity prices.
Put this in perspective, that's about one quarter of our market cap today, and over the next two years, we see the opportunity to deliver free cash flow equivalent to half our current market cap.
We understand the importance of leverage reduction, $300 million of free cash flow is equivalent to about $17 per share.
We believe that paying down debt is the most shareholder friendly initiative that we can deliver today.
We expect our leverage ratio will be 1.5 times by the third quarter, and we have line of sight to 1 times by midyear 2023.
Our capital investments are disciplined and are being allocated to our best opportunities.
We are fortunate to have a strong portfolio of high return oil projects in the USS Premier Oil Basin.
We are maintaining our capital discipline, keeping activity levels flat from 2021, keeping oil production approximately flat from our Q4 '21 exit rate.
From a field to the office, our people are dedicated to delivering results that will build value for our shareholders.
Our operations teams executed extremely well in 2021, as we seamlessly integrated two acquisitions posted strong will result in Howard County and further extended our oil weighted inventory with the appraisal of two additional formations.
These achievements in 2021 underpinned our capital efficient 2022 development plan.
In Howard County, we closed the Sabalo deal in July and went to work on new wells that are today among the best performing wells of all of our Howard County packages, driving oil production above the high-end of guidance for the fourth quarter.
In Western Glasscock County, we completed the 10 well books package at the end of the fourth quarter.
Results of the 8 wells in the lower Sprayberry and Wolfcamp A and B formations are benefiting from our optimized completion design, and are outperforming the previous package we completed in Western Glasscock County by approximately 38%.
These recent acquisitions in Howard and Western Glasscock counties, and our subsequent appraisal activities have extended our all weighted inventory runway to approximately 8 years at current activity levels with a breakeven oil prices of $55 or below.
The slots in our deck have details to help you understand the quality and depth of our inventory in each of our operating areas.
As Jason said, our forward development strategy allocates our capital to our highest return projects in Howard county.
Returns and efficiencies benefit from the fact that our acreages contiguous, and in many areas we can drill extended laterals and we plan to drill 18 15,000-foot lateral wells in 2022.
Our corporate strategy continues to be focused on leverage reduction.
In order to accomplish this, we are maintaining flat activity levels this year as we keep oil production relatively flat, and generate strong free cash flows.
To optimize our capital efficiency for the year and synchronize our drilling and completion crews, we are currently operating 3 drilling rigs and 2 completions crews, and planned to release 1 rig and 1 crew by the end of the first quarter.
After that, we will maintain 2 rigs and 1 crew through the end of 2022.
Like the rest of the industry, we are impacted by service cost inflation.
From fourth quarter actuals, we have factored in an approximately 15% inflation into our 2022 capital budget, and had locked in much of our pricing for services through the first half of the year, including frac services, sand and casing cost.
We are currently working to extend our service contracts into the second half of 2022 and optimize our inventory management to further de-risk our full year capital budget from any additional inflationary pressures.
We've made exceptional progress over the last year, both financially and operationally.
These accomplishments have allowed us to enter 2022 with strong momentum and confidence in our ability to generate free cash flow, reduce leverage, and position us to return cash to shareholders in the near future.
For 2022, we expect to generate about $300 million of free cash flow at current commodity prices, and this cash flow will be directed toward leverage reduction.
Turning to our capital budget, for 2022 investment program is approximately $520 million.
This plan entails flat activity levels when compared to 2021, offset by industry wide inflationary pressures in the oilfield service cost and higher non-operated activity levels.
Our budget also includes ESG focused investments of about $10 million to work toward the company's achievement of our announced 2025 emissions targets.
Our capital is being allocated to our highest return projects and is expected to hold our production flat with fourth quarter 2021 levels.
This will generate full year oil production growth of 24% to 34%.
There's no doubt that the recent run in oil price has led to industrywide inflation and higher costs at the field level.
Our people are focused on mitigating higher costs through cost innovation and new efficiency gains.
We have locked in a significant portion of our costs for the first half of the year and, as Karen noted, are working toward extending this price certainty into the second half of 2022.
To underpin our capital budget and de-leveraging goals, we continue to focus on hedging.
We have a strong track record of mitigating risk and ensuring strong returns for our capital investments.
Our free cash flow and leverage ratio projections are supported by our current hedge positions, covering about 75% of our projected oil production in 2022.
We expect minor adjustments to our position throughout this year as we lock in near-term prices to facilitate our leverage reduction goals.
For 2023, we have begun building our oil hedge position using colors with the floors, lined to further our leverage goals and ultimately returning cash to shareholders in 2023.
The current hedge volumes for 2023 are heavily weighted toward the front half of the year, giving us more confidence in achieving our leverage goals on the timelines previously messaged.
As previously discussed, A&D has been and continues to be at focus for us.
Since 2019, we have transformed Laredo through oil-weighted high-margin acquisitions and significant production and locations with higher oil cuts.
These transactions accelerated our de-leveraging or accretive to shareholders and put us in a position to deliver capital to shareholders well ahead of what we would have otherwise been able to do.
Our strategy is well-defined, and shareholders should expect that any future acquisitions would complement our strategy to return value to shareholders made possible by continuing balance sheet improvement.
We will continue to seek opportunities to grow our inventory of high-margin wells to achieve the economies of scale necessary to drive sustainable free cash flow and to reduce volatility in our operations, and in our equity performance.
With 8 years of high-margin oil weighted inventory, we are now in a position for sustainable long-term free cash flow generation.
This means we believe that we can meet our leverage target of 1.0 times by midyear 2023 and begin to return capital to shareholders in 2023.
While we will continue to look at acquisitions, we can be patient and opportunistic in what transactions we pursue.
We have the right team, the right assets, and are excited to come to work every day and deliver on our value creation strategy.

user
in q4, produced 41,080 barrels of oil per day & 85,240 barrels of oil equivalent per day, increase of 87% and 3%, respectively.

assistant