Laredo Oil Expands Montana Oil Projects Despite Mounting Losses and Legal Challenges

New development deals and investor funds are helping Laredo push ahead, but financial strain and litigation loom large.

April 22, 2025

Laredo Oil Reports Wider Losses as It Scales Montana Drilling Ventures

Laredo Oil is scaling up activity across Montana’s oil fields, even as financial pressure continues to build. In its latest quarterly update, the company reported a $1.7 million net loss for the nine months ending February 28, 2025. It’s the latest in a series of annual losses, but Laredo isn’t pulling back—it’s pushing forward with new developments backed by strategic partnerships and fresh capital.

Through its subsidiaries—Lustre Oil Company, Hell Creek Crude, and West Fork Resources—Laredo is focused on drilling and developing oil prospects across Valley, Daniels, and Roosevelt Counties. The company has increased its investment in oil and gas acquisition and drilling to $3.6 million, up sharply from $610,000 last year. These investments are fueling multiple projects, including the Lustre Field Prospect and the Midfork Field development.

Texakoma Partnership Drives Well Activity

Texakoma Exploration & Production has played a key role in supporting Lustre's efforts. Texakoma is funding the drilling of up to eight wells, while Laredo retains a 15% carried interest. This arrangement allows Laredo to participate in production upside without bearing initial drilling costs. Three wells have already been drilled, and infrastructure is in place to bring them online once conditions in the field improve.

Investor-Funded Expansion in the Midfork Field

In the Midfork Field, investor commitments of over $2.6 million are driving another development well through a participation agreement with Hell Creek Crude. Additional investors have joined, and a split in revenue will shift as payouts to participants are completed. The Reddig 11-21 well, the first in this program, is being prepped for production following additional completions.

West Fork Project Prepares for Exploratory Drilling

Laredo is also advancing its West Fork project, which targets over 30,000 acres near the Fort Peck Reservation. To date, $2.25 million has been raised, with $1.25 million in escrow until the full $7.5 million target is reached. Funds will be used to drill three exploratory wells, with $1 million already committed to the first well.

Financial Strains and Asset Write-Downs

While development continues, Laredo’s balance sheet highlights the challenges ahead. Total liabilities have reached $17.3 million, with an accumulated deficit of $24.4 million. The company is using equity sales and a range of financing tools—including promissory and bridge notes—to keep operations funded. As of February, it held $1.5 million in restricted cash , largely tied to well development.

Several legacy wells and investments have been reassessed. The company recorded impairments on its Olfert 11-4 well and Cat Creek Holdings investment, citing limited progress and ongoing losses. These changes led to restatements of prior-year financials, following a re-audit of 2023 statements after Laredo replaced its former auditor.

Legal Challenges and Vendor Claims

On the legal front, Lustre Oil Company is working to resolve outstanding claims tied to drilling activity at the Olfert 11-4 site. Judgments and claims from service providers now total nearly $1 million. The company expects to resolve these through future production revenue, particularly from its new saltwater disposal infrastructure.

Outlook

Despite the losses and legal matters, Laredo continues to build momentum. It’s expanding its footprint, bringing in capital, and positioning wells for production. Execution and continued funding will determine how far—and how fast—the company can convert its acreage into revenue-producing assets.