W&T Offshore Announces First Quarter 2020 Results
W&T Offshore (NYSE: WTI) reported strong operational and financial results for Q1 2020, producing 53,553 Boe/d, a 61% increase from Q1 2019. The company achieved net income of $66 million ($0.46/share) and significant Adjusted EBITDA of $62.1 million, despite challenging oil prices. W&T reduced long-term debt by $72.5 million, enhancing financial flexibility. However, it suspended drilling activities and lowered capital expenditures due to declining commodity prices. The company aims to maintain liquidity while responding to ongoing market uncertainty and recently completed a 25% acquisition in Magnolia Field.
- 61% increase in production from Q1 2019 to 53,553 Boe/d.
- Net income of $66 million for Q1 2020, marking a significant improvement from a loss in Q1 2019.
- Adjusted EBITDA grew 9% year-over-year to $62.1 million.
- Reduced long-term debt by $72.5 million, saving $7.1 million annually in interest.
- Adjusted Net Income significantly impacted by unrealized commodity derivative gains.
- Capital expenditures drastically cut to $15 million to $25 million from prior estimates of $50 million to $100 million.
HOUSTON, June 22, 2020 (GLOBE NEWSWIRE) -- W&T Offshore, Inc. (NYSE: WTI) (“W&T” or the “Company”) today reported operational and financial results for the first quarter 2020.
Key highlights included:
- Produced 53,553 barrels of oil equivalent per day (“Boe/d”), or 4.9 million Boe (
48% liquids), in the first quarter of 2020, near the high end of W&T’s guidance range, reflecting a61% increase from the first quarter of 2019 and slightly higher than the fourth quarter of 2019; - Reported net income of
$66.0 million or$0.46 per share and Adjusted Net Income of$5.8 million or$0.04 per share in the first quarter of 2020; - Generated significant Adjusted EBITDA of
$62.1 million for the first quarter of 2020, despite a lower pricing environment; - Recorded strong cash flow from operating activities of
$84.3 million in the first quarter; - Closed the acquisition of an additional
25% working interest in the deepwater Magnolia Field; - Since December 31,2019, W&T has reduced its long-term debt associated with its Senior Second Lien Notes by
$72.5 million as of the date of this press release resulting in annualized interest savings of$7.1 million ; - Announced on March 23, 2020 that W&T was the apparent high bidder on two blocks in the Gulf of Mexico Lease Sale 254 held by the Bureau of Ocean Energy Management ("BOEM") on March 18, 2020;
- Responded to the current low oil price environment with definitive actions to maintain financial flexibility, protect cash flow and preserve future value:
o Suspended all drilling activities and significantly reduced its estimate of 2020 capital expenditures to$15 million to$25 million ;
o Proactively curtailed production at selected oil-weighted fields operated by W&T;
o Implementing15% to25% reductions in lease operating expenses (“LOE”) without compromising safety or operational capabilities; and - Completed the semi-annual redetermination of the borrowing base under the revolving credit facility which was reduced modestly from
$250 million to$215 million .
Tracy W. Krohn, W&T's Chairman and Chief Executive Officer, stated, “Since the formation of W&T in 1983, we have been able to persevere through multiple pricing downturns in the past because our focus and strategy is to maximize cash flow generation and continuously improve the profitability of our assets, at any commodity price. We are very pleased that, thus far, none of our onshore or offshore employees have tested positive for COVID-19. However, the global COVID-19 pandemic coupled with supply and demand imbalances have created an environment of uncertainty across the oil sector and temporarily reduced oil prices to unprecedented low levels. We acted quickly to address these issues. We continue working to minimize the operational and financial impacts for the remainder of 2020, while also looking to preserve liquidity and value. We have reduced our capital expenditure budget for the remainder of 2020, shut-in a limited number of oil-weighted operated properties and experienced production shut-ins from non-operated oil and gas properties. Additionally, we are reducing LOE without compromising safety or our operational capabilities. We also recently completed our semi-annual borrowing base redetermination, which resulted in a modest reduction to the revolving credit facility and the amended agreement provides more manageable covenants in light of changes in oil prices and flexibility in both the current environment and going forward.”
“I am proud of how we have operated over the past three months and pleased with our strong first quarter results. Production was near the high end of guidance, we generated
For the first quarter of 2020, W&T reported net income of
Adjusted EBITDA for the first quarter of 2020 totaled
Adjusted Net Income and Adjusted EBITDA are non-GAAP financial measures, which are described in more detail and reconciled to net income, their most comparable GAAP measure, in the attached tables below under “Non-GAAP Information.”
Production, Prices and Revenues: Production for the first quarter of 2020 was 53,553 Boe/d or 4.9 MMBoe, a slight increase compared to 52,773 Boe/d in the fourth quarter of 2019 and up
For the first quarter of 2020, W&T’s average realized crude oil sales price was
Revenues for the first quarter of 2020 increased
Acquisition of Magnolia Field: On December 12, 2019, W&T closed the acquisition of a
On March 31, 2020, W&T closed the acquisition of the remaining
Lease Operating Expenses: LOE, which includes base lease operating expenses, insurance premiums, workovers and facilities maintenance was
Gathering, Transportation Costs and Production Taxes: Gathering, transportation costs and production taxes totaled
Depreciation, Depletion, Amortization and Accretion (“DD&A”): DD&A, including accretion for asset retirement obligations, was
General and Administrative Expenses (“G&A”): G&A was
COVID-19 Response:
W&T is committed to the health and safety of all its employees and contractors and has taken steps to ensure their continued safety in its response to the COVID-19 pandemic. At W&T’s corporate offices, the Company mandated a work-from-home policy as of March 23, 2020 and assured that all employees had the ability to continue performing their work duties remotely. W&T recently reopened its corporate office and has implemented actions to protect its employees working in its offices including weekly temperature checks. The Company will continue to monitor the situation and will follow the advice of government and health leaders.
For its field operations, the Company instituted screening of all personnel prior to entry to heliports and shorebases as well as its two Alabama gas plants, which includes a questionnaire and temperature check. The Company conducts daily temperature screenings at all offshore facilities and implemented procedures for distancing and hygiene at its field locations.
Derivative (Gain) Loss: In the first quarter of 2020, W&T recorded a net gain of
In the first quarter of 2020, W&T added natural gas Henry Hub costless collars on 40,000 Mcf per day of production for the period April 1, 2020 through December 31, 2022 with a floor of
Since the end of the first quarter of 2020, W&T added Henry Hub costless collars on 20,000 Mcf per day of production for the period January 1, 2021 through December 31, 2021 with a floor of
A listing of the Company’s current outstanding derivative positions is included in the tables below as well as in the Investor Relations section of W&T’s web site under the “Financial Info” tab.
Interest Expense: Interest expense, net of interest income, as reported in the income statement, in the first quarter of 2020 was
Income Tax: W&T recorded an income tax expense of
As of March 31, 2020 and December 31, 2019, W&T had current income taxes receivable of
W&T is not currently forecasting any cash income tax expense for the near-term, and a portion of the Company’s deferred tax assets remain partially offset by a valuation allowance.
Balance Sheet, Cash Flow and Liquidity: Net cash provided by operating activities for the three months ended March 31, 2020 was
During the three months ended March 31, 2020, W&T repurchased
W&T’s bank group recently completed its regularly scheduled spring borrowing base redetermination. The borrowing base was set by the bank group at
Capital Expenditures: Due to the recent sharp decline in oil prices, W&T has suspended drilling and completion activities and significantly reduced its estimate of 2020 capital expenditures to
OPERATIONS UPDATE
W&T successfully drilled one well in the first quarter of 2020 at East Cameron 338/349 but has since suspended all other drilling activity in the current uncertain pricing environment.
East Cameron 338/349 Cota (operated, shallow water, in JV Drilling Program): W&T successfully drilled its first well of 2020 in the East Cameron 338/349 Field. The well is in over 290 feet of water and was drilled to a total depth of over 6,000 feet and encountered approximately 100 feet of net oil pay. Initial production is planned for the first half of 2021, subject to the commodity price environment and the completion of certain infrastructure projects. The Company has a
Well Recompletions and Workovers: During the first quarter of 2020, the Company performed one recompletion and four workovers that in total added approximately 700 net Boe/d to production. W&T currently plans to continue to perform recompletions and workovers that meet economic thresholds.
Gulf of Mexico Lease Sale 254:
As previously announced, W&T was the apparent high bidder on two blocks in the Gulf of Mexico Lease Sale 254 held by the BOEM on March 18, 2020, which included one deepwater block, Garden Banks block 782, and one shallow water block, Eugene Island Area South Addition block 345.
These two blocks cover a total of approximately 10,760 acres and, if awarded, the Company will pay approximately
2020 Guidance
Due to the recent sharp decline in oil prices, W&T significantly reduced its 2020 capital spending expectations and has also reduced its planned asset retirement expenditures. As of April 20, 2020, W&T temporarily shut-in production of approximately 3,300 Boe/d in selected oil-weighted fields operated by the Company but its Mahogany field and its key natural gas fields including its Mobile Bay complex were not affected. The Company continues to monitor these fields to determine the appropriate timing of returning these fields to production. W&T’s production was also deferred at certain non-operated fields. Those third-party deferrals totaled approximately 3,400 Boe/d net to W&T. Recently, approximately 2,900 Boe/d of third party deferrals were returned to production. Lastly, W&T temporarily shut-in a portion of its production due to Tropical Storm Cristobal which resulted in a total of approximately 110,000 net Boe of deferred production. There was no material damage done by the storm to any of W&T’s infrastructure.
As a result of the combination of ongoing uncertainty in commodity markets, production curtailments, and proactive efforts to continually reduce costs in the lower price environment, the Company has withdrawn the annual guidance it provided earlier this year and will provide such guidance again in the future when there is increased forward visibility in oil and gas markets.
Conference Call Information: W&T will hold a conference call to discuss its financial and operational results on June 23, 2020, at 9:00 a.m. Central Time (10:00 a.m. Eastern Time). Interested parties may participate by dialing (877) 270-2148. International parties may dial (412) 902-6510. Participants should request to connect to the “W&T Offshore Call.” This call will also be webcast and available on W&T’s website at www.wtoffshore.com on the “Overview” page under the “Investor Relations” section. An audio replay will be available on the Company’s website following the call.
About W&T Offshore
W&T Offshore, Inc. is an independent oil and natural gas producer with operations offshore in the Gulf of Mexico and has grown through acquisitions, exploration and development. The Company currently has working interests in 51 producing fields in federal and state waters and has under lease approximately 815,000 gross acres, including approximately 595,000 gross acres on the Gulf of Mexico Shelf and approximately 220,000 gross acres in the Gulf of Mexico deepwater. A majority of the Company’s daily production is derived from wells it operates. For more information on W&T, please visit the Company’s website at www.wtoffshore.com.
Forward-Looking and Cautionary Statements
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements reflect our current views with respect to future events, based on what we believe are reasonable assumptions. No assurance can be given, however, that these events will occur. These statements are subject to risks and uncertainties that could cause actual results to differ materially including, among other things, market conditions, oil and gas price volatility, uncertainties inherent in oil and gas production operations and estimating reserves, unexpected future capital expenditures, competition, the success of our risk management activities, governmental regulations, uncertainties and other factors discussed in W&T Offshore’s Annual Report on Form 10-K for the year ended December 31, 2019 and subsequent Form 10-Q reports found at www.sec.gov or at our website at www.wtoffshore.com under the Investor Relations section. Investors are urged to consider closely the disclosures and risk factors in these reports. We refer to feet of “pay” in our discussions concerning the evaluation of our recently drilled wells. This refers to geological indications, typically obtained from well logging, of the estimated thickness of sands which we believe are capable of producing hydrocarbons in commercial quantities. These indications of “pay” may not necessarily forecast the amount of future production or reserve quantities from the well, which can be dependent upon numerous other factors.
| W&T OFFSHORE, INC. AND SUBSIDIARIES | ||||||||||||
| Condensed Consolidated Statements of Operations | ||||||||||||
| (In thousands, except per share data) | ||||||||||||
| (Unaudited) | ||||||||||||
| Three Months Ended | ||||||||||||
| March 31, | December 31, | March 31, | ||||||||||
| 2020 | 2019 | 2019 | ||||||||||
| Revenues: | ||||||||||||
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| NGLs | 6,452 | 6,912 | 6,448 | |||||||||
| Natural gas | 29,300 | 41,256 | 21,838 | |||||||||
| Other | 3,726 | 2,620 | 1,091 | |||||||||
| Total revenues | 124,128 | 151,894 | 116,080 | |||||||||
| Operating costs and expenses: | ||||||||||||
| Lease operating expenses | 54,775 | 53,299 | 43,456 | |||||||||
| Gathering, transportation costs and production taxes | 6,365 | 7,707 | 6,839 | |||||||||
| Depreciation, depletion, amortization and accretion | 39,126 | 37,818 | 33,766 | |||||||||
| General and administrative expenses | 13,963 | 17,564 | 14,109 | |||||||||
| Derivative (gain) loss | (61,912 | ) | 18,659 | 48,886 | ||||||||
| Total costs and expenses | 52,317 | 135,047 | 147,056 | |||||||||
| Operating income (loss) | 71,811 | 16,847 | (30,976 | ) | ||||||||
| Interest expense, net | 17,110 | 16,635 | 16,282 | |||||||||
| Gain on purchase of debt | (18,501 | ) | - | - | ||||||||
| Other (income) expense, net | 723 | (1,176 | ) | 331 | ||||||||
| Income (loss) before income tax (benefit) expense | 72,479 | 1,388 | (47,589 | ) | ||||||||
| Income tax expense (benefit) | 6,499 | (8,171 | ) | 172 | ||||||||
| Net income (loss) | $ | 65,980 | $ | 9,559 | $ | (47,761 | ) | |||||
| Basic and diluted earnings (loss) per common share | $ | 0.46 | $ | 0.07 | $ | (0.34 | ) | |||||
| Weighted average common shares outstanding | 141,546 | 140,769 | 140,462 | |||||||||
| W&T OFFSHORE, INC. AND SUBSIDIARIES | ||||||||||||
| Condensed Operating Data | ||||||||||||
| (Unaudited) | ||||||||||||
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| Three Months Ended | ||||||||||||
| March 31, | December 31, | March 31, | ||||||||||
| 2020 | 2019 | 2019 | ||||||||||
| Net sales volumes: | ||||||||||||
| Oil (MBbls) | 1,827 | 1,778 | 1,478 | |||||||||
| NGL (MBbls) | 495 | 415 | 309 | |||||||||
| Oil and NGLs (MBbls) | 2,322 | 2,194 | 1,787 | |||||||||
| Natural gas (MMcf) | 15,307 | 15,966 | 7,288 | |||||||||
| Total oil and natural gas (MBoe) (1) | 4,873 | 4,855 | 3,001 | |||||||||
| Average daily equivalent sales (MBoe/d) | 53.6 | 52.8 | 33.3 | |||||||||
| Average realized sales prices: | ||||||||||||
| Oil ($/Bbl) | $ | 46.33 | $ | 56.84 | $ | 58.66 | ||||||
| NGLs ($/Bbl) | 13.03 | 16.64 | 20.88 | |||||||||
| Oil and NGLs ($/Bbl) | 39.23 | 49.23 | 52.13 | |||||||||
| Natural gas ($/Mcf) | 1.91 | 2.58 | 3.00 | |||||||||
| Barrel of oil equivalent ($/Boe) | 24.71 | 30.75 | 38.31 | |||||||||
| Average costs and expenses per Boe ($/Boe): | ||||||||||||
| Lease operating expenses | $ | 11.24 | $ | 10.98 | $ | 14.48 | ||||||
| Gathering, transportation costs and production taxes | 1.31 | 1.59 | 2.28 | |||||||||
| Depreciation, depletion, amortization and accretion | 8.03 | 7.79 | 11.25 | |||||||||
| General and administrative expenses | 2.87 | 3.62 | 4.70 | |||||||||
(1) MBoe is determined using the ratio of six Mcf of natural gas to one Bbl of crude oil, condensate or NGLs (totals may not compute due to rounding). The conversion ratio does not assume price equivalency and the price on an equivalent basis for oil, NGLs and natural gas may differ significantly.
| W&T OFFSHORE, INC. AND SUBSIDIARIES | ||||||||
| Condensed Consolidated Balance Sheets | ||||||||
| (In thousands) | ||||||||
| March 31, | December 31, | |||||||
| 2020 | 2019 | |||||||
| (Unaudited) | ||||||||
| Assets | ||||||||
| Current assets: | ||||||||
| 69%; width: | 1%; width: | 1%; width: | 12%; width: | 1%; width: | 2%; width: | 1%; width: | 12%; width: | 1%; width: |
| Receivables: | ||||||||
| Oil and natural gas sales | 35,413 | 57,367 | ||||||
| Joint interest and other, net | 12,277 | 19,400 | ||||||
| Income taxes | 1,861 | 1,861 | ||||||
| Total receivables | 49,551 | 78,628 | ||||||
| Prepaid expenses and other assets | 78,658 | 30,691 | ||||||
| Total current assets | 175,783 | 141,752 | ||||||
| Oil and natural gas properties and other | 8,567,164 | 8,552,513 | ||||||
| Less accumulated depreciation, depletion and amortization | 7,837,120 | 7,803,715 | ||||||
| Oil and natural gas properties and other, net | 730,044 | 748,798 | ||||||
| Restricted deposits for asset retirement obligations | 15,574 | 15,806 | ||||||
| Deferred income taxes | 57,418 | 63,916 | ||||||
| Other assets | 30,084 | 33,447 | ||||||
| Total assets | $ | 1,008,903 | $ | 1,003,719 | ||||
| Liabilities and Shareholders’ Deficit | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 61,729 | $ | 102,344 | ||||
| Undistributed oil and natural gas proceeds | 28,176 | 29,450 | ||||||
| Advances from joint interest partners | 18,285 | 5,279 | ||||||
| Asset retirement obligations | 2,803 | 21,991 | ||||||
| Accrued liabilities | 34,428 | 30,896 | ||||||
| Total current liabilities | 145,421 | 189,960 | ||||||
| Long-term debt | 668,058 | 719,533 | ||||||
| Asset retirement obligations | 361,297 | 333,603 | ||||||
| Other liabilities | 16,464 | 9,988 | ||||||
| Commitments and contingencies | - | - | ||||||
| Shareholders’ deficit: | ||||||||
| Common stock, | ||||||||
| 141,669 outstanding for both dates presented | 1 | 1 | ||||||
| Additional paid-in capital | 548,098 | 547,050 | ||||||
| Retained deficit | (706,269 | ) | (772,249 | ) | ||||
| Treasury stock, at cost; 2,869 shares for both dates presented | (24,167 | ) | (24,167 | ) | ||||
| Total shareholders’ deficit | (182,337 | ) | (249,365 | ) | ||||
| Total liabilities and shareholders’ deficit | $ | 1,008,903 | $ | 1,003,719 | ||||
| W&T OFFSHORE, INC. AND SUBSIDIARIES | ||||||||||||||
| Condensed Consolidated Statements of Cash Flows | ||||||||||||||
| (In thousands) | ||||||||||||||
| (Unaudited) | ||||||||||||||
| Three Months Ended | ||||||||||||||
| March 31, | December 31, | March 31, | ||||||||||||
| 2020 | 2019 | 2019 | ||||||||||||
| Operating activities: | ||||||||||||||
| Net income (loss) | $ | 65,980 | $ | 9,559 | $ | (47,761 | ) | |||||||
| Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||||||||||||||
| Depreciation, depletion, amortization and accretion | 39,126 | 37,818 | 33,766 | |||||||||||
| Amortization of debt items and other items | 1,625 | 1,600 | 1,152 | |||||||||||
| Share-based compensation | 1,048 | 1,261 | (78 | ) | ||||||||||
| Derivative (gain) loss | (61,912 | ) | 18,659 | 48,886 | ||||||||||
| Derivatives cash receipts (payments), net | 4,404 | (3,642 | ) | 11,948 | ||||||||||
| Gain on purchase of debt | (18,501 | ) | - | - | ||||||||||
| Deferred income taxes | 6,499 | (8,338 | ) | 172 | ||||||||||
| Changes in operating assets and liabilities: | - | |||||||||||||
| Oil and natural gas receivables | 21,954 | (5,741 | ) | 6,496 | ||||||||||
| Joint interest receivables | 7,123 | 11,084 | (2,986 | ) | ||||||||||
| Prepaid expenses and other assets | 11,011 | 4,865 | (4,269 | ) | ||||||||||
| Income tax receivables | - | 35,049 | - | |||||||||||
| Asset retirement obligation settlements | (249 | ) | (3,703 | ) | (254 | ) | ||||||||
| Cash advances from JV partners | 13,006 | (31,194 | ) | 44,644 | ||||||||||
| Accounts payable, accrued liabilities and other | (6,790 | ) | (21,646 | ) | (6,871 | ) | ||||||||
| Net cash provided by operating activities | 84,324 | 45,631 | 84,845 | |||||||||||
| Investing activities: | ||||||||||||||
| Investment in oil and natural gas properties and equipment | (33,575 | ) | (32,224 | ) | (31,581 | ) | ||||||||
| Acquisition of property interest | (2,002 | ) | (20,301 | ) | - | |||||||||
| Purchases of furniture, fixtures and other | (70 | ) | (69 | ) | - | |||||||||
| Net cash used in investing activities | (35,647 | ) | (52,594 | ) | (31,581 | ) | ||||||||
| Financing activities: | ||||||||||||||
| Repayments on credit facility | (25,000 | ) | - | - | ||||||||||
| Purchase of Senior Second Lien Notes | (8,536 | ) | - | - | ||||||||||
| Debt transaction costs and other | - | (2,345 | ) | (441 | ) | |||||||||
| Net cash used in financing activities | (33,536 | ) | (2,345 | ) | (441 | ) | ||||||||
| Increase (decrease) in cash and cash equivalents | 15,141 | (9,308 | ) | 52,823 | ||||||||||
| Cash and cash equivalents, beginning of period | 32,433 | 41,741 | 33,293 | |||||||||||
| Cash and cash equivalents, end of period | $ | 47,574 | $ | 32,433 | $ | 86,116 | ||||||||
| W&T OFFSHORE, INC. AND SUBSIDIARIES | |||||||||
| Financial Commodity Derivative Positions | |||||||||
| As of June 22, 2020 | |||||||||
| Production Period | Instrument | Avg. Daily Volumes | Weighted Avg Swap Price | Weighted Avg Put Price | Weighted Avg Call Price | ||||
| Crude Oil - WTI NYMEX: | (bbls) | (per Bbl) | (per Bbl) | (per Bbl) | |||||
| Jun 2020 - Dec 2020 | Costless Collars | 1,000 | |||||||
| Jun 2020 - Dec 2020 | Costless Collars | 9,000 | |||||||
| Jun 2020 - Dec 2020 | Calls (long) | 10,000 | |||||||
| Jan 2021 - Dec 2021 | Swaps | 1,000 | |||||||
| Natural Gas - Henry Hub NYMEX: | (Mcf) | (per Mcf) | (per Mcf) | (per Mcf) | |||||
| June 2020 - Dec 2022 | Calls (long) | 40,000 | |||||||
| June 2020 - Dec 2022 | Costless Collars | 40,000 | |||||||
| June 2020 - Dec 2020 | Costless Collars | 10,000 | |||||||
| Jan 2021 - Dec 2021 | Costless Collars | 20,000 | |||||||
| Jan 2021 - Dec 2021 | Costless Collars | 10,000 | |||||||
W&T OFFSHORE, INC. AND SUBSIDIARIES
Non-GAAP Information
Certain financial information included in W&T’s financial results are not measures of financial performance recognized by accounting principles generally accepted in the United States, or GAAP. These non-GAAP financial measures are “Adjusted Net Income” and “Adjusted EBITDA.” Management uses these non-GAAP financial measures in its analysis of performance. In addition, Adjusted EBITDA is a key metric used to determine the Company’s incentive compensation awards. These disclosures may not be viewed as a substitute for results determined in accordance with GAAP and are not necessarily comparable to non-GAAP performance measures which may be reported by other companies.
Reconciliation of Net Income to Adjusted Net Income
Adjusted Net Income does not include the unrealized commodity derivative loss (gain), amortization of derivative premium, bad debt reserve, deferred tax benefit, gain on debt transactions, write-off contingent liability, litigation and other. Adjusted Net Income is presented because the timing and amount of these items cannot be reasonably estimated and affect the comparability of operating results from period to period, and current periods to prior periods.
| Three Months Ended | ||||||||||||
| March 31, | December 31, | March 31, | ||||||||||
| 2020 | 2019 | 2019 | ||||||||||
| (In thousands, except per share amounts) | ||||||||||||
| (Unaudited) | ||||||||||||
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| Unrealized commodity derivative (gain) loss | (52,520 | ) | 18,052 | 50,459 | ||||||||
| Amortization of derivative premium | 4,349 | 4,248 | 3,845 | |||||||||
| Bad debt reserve | 36 | 13 | 120 | |||||||||
| Income tax expense (benefit) | 6,499 | (8,338 | ) | - | ||||||||
| Gain on debt transactions | (18,501 | ) | - | - | ||||||||
| Litigation and other | - | 816 | - | |||||||||
| Adjusted Net Income | $ | 5,843 | $ | 24,350 | $ | 6,663 | ||||||
| Basic and diluted adjusted earnings per common share | $ | 0.04 | $ | 0.17 | $ | 0.05 | ||||||
W&T OFFSHORE, INC. AND SUBSIDIARIES
Non-GAAP Information
Reconciliation of Net Income to Adjusted EBITDA
The Company defines Adjusted EBITDA as net income plus income tax (benefit) expense, net interest expense, and depreciation, depletion, amortization and accretion, excluding the unrealized commodity derivative gain or loss, amortization of derivative premium, bad debt reserve, gain on debt transactions, litigation and other. W&T believes the presentation of Adjusted EBITDA provides useful information regarding its ability to service debt and to fund capital expenditures. The Company believes this presentation is relevant and useful because it helps investors understand W&T’s operating performance and makes it easier to compare its results with those of other companies that have different financing, capital and tax structures. Adjusted EBITDA should not be considered in isolation from or as a substitute for net income, as an indication of operating performance or cash flows from operating activities or as a measure of liquidity. Adjusted EBITDA, as W&T calculates it, may not be comparable to Adjusted EBITDA measures reported by other companies. In addition, Adjusted EBITDA does not represent funds available for discretionary use.
The following table presents a reconciliation of W&T’s net income to Adjusted EBITDA.
| Three Months Ended | ||||||||||||
| March 31, | December 31, | March 31, | ||||||||||
| 2020 | 2019 | 2019 | ||||||||||
| (In thousands) | ||||||||||||
| (Unaudited) | ||||||||||||
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| Income tax expense (benefit) | 6,499 | (8,171 | ) | 172 | ||||||||
| Interest expense, net | 17,110 | 16,635 | 16,282 | |||||||||
| Depreciation, depletion, amortization and accretion | 39,126 | 37,818 | 33,766 | |||||||||
| Unrealized commodity derivative (gain) loss | (52,520 | ) | 18,052 | 50,459 | ||||||||
| Amortization of derivative premium | 4,349 | 4,248 | 3,845 | |||||||||
| Bad debt reserve | 36 | 13 | 120 | |||||||||
| Gain on debt transactions | (18,501 | ) | - | - | ||||||||
| Litigation and other | - | 816 | - | |||||||||
| Adjusted EBITDA | $ | 62,079 | $ | 78,970 | $ | 56,883 |
FAQ
What were W&T Offshore's production levels in Q1 2020?
What was W&T Offshore's net income for Q1 2020?
How did W&T Offshore perform compared to Q1 2019?
What adjustments did W&T Offshore make due to low oil prices?
What was the Adjusted EBITDA for W&T Offshore in Q1 2020?
How much long-term debt has W&T Offshore reduced recently?
