W&T Offshore Announces First Quarter 2021 Results
W&T Offshore reported strong operational and financial results for Q1 2021, producing 39,657 Boe/d, a 4% increase from Q4 2020. The company reported a net loss of $0.7 million but adjusted net income of $15.9 million, marking a significant improvement. Adjusted EBITDA surged 63% to $57.6 million, driven by higher commodity prices and enhanced production efficiency. Free cash flow also rose dramatically to $40 million. The company focused on controlling costs, with reduced lease operating expenses, and indicated positive outlooks for the remainder of the year due to favorable market conditions and strategic growth plans.
- Increased production to 39,657 Boe/d, exceeding guidance and reflecting a 4% rise from Q4 2020.
- Adjusted Net Income of $15.9 million, a significant recovery from a net loss in the prior quarter.
- Adjusted EBITDA increased 63% to $57.6 million, driven by improved commodity pricing.
- Free Cash Flow rose to $40 million, a 182% increase from the previous quarter.
- Cut lease operating expenses significantly, demonstrating effective cost management.
- Reported a net loss of $0.7 million compared to net income of $66 million in Q1 2020.
- Production decreased 26% from Q1 2020, indicating a year-over-year decline.
- Significant unrealized commodity derivative losses of $16.3 million impacted earnings.
HOUSTON, May 04, 2021 (GLOBE NEWSWIRE) -- W&T Offshore, Inc. (NYSE: WTI) (“W&T” or the “Company”) today reported operational and financial results for the first quarter 2021.
Key highlights included:
- Produced 39,657 barrels of oil equivalent per day (“Boe/d”), or 3.6 million Boe (
50% liquids), in the first quarter of 2021, above the midpoint of W&T’s guidance range and reflecting a4% increase from the fourth quarter of 2020; - Reported net loss of
$0.7 million or$0.01 per share and Adjusted Net Income of$15.9 million or$0.11 per share in the first quarter of 2021; - Generated significant Adjusted EBITDA of
$57.6 million for the first quarter of 2021, up63% from$35.3 million in the fourth quarter of 2020; - Recorded strong net cash provided by operating activities of
$45.0 million in the first quarter; - Increased Free Cash Flow to
$40.0 million in the first quarter of 2021, an increase of182% from$14.2 million in the fourth quarter of 2020; - Remained focused on controlling expenses and reported first quarter 2021 lease operating expense (“LOE”) and general and administrative (“G&A”) costs at the low end or below W&T’s guidance ranges; and
- Issued W&T’s inaugural Environmental, Social and Governance (“ESG”) report which is now available on the Company’s web site.
Tracy W. Krohn, W&T’s Chairman and Chief Executive Officer, stated, “We had a good first quarter with our operational and financial results and believe that the improved commodity price environment and our commitment to expanding margins will lead to a very good year for us in 2021. Operationally we exceeded guidance in several areas. We were above the midpoint in production, below the midpoint in LOE and below the low end of guidance for G&A. Our strong operational performance coupled with higher commodity pricing led to a
“While I am pleased with our results, I am equally proud of our inaugural ESG report that we released in March. We founded W&T with core values centered around safely and sustainably operating our assets and this has guided our success and provided the foundation for W&T to grow into a trusted operator. We have empowered our management to allocate resources and tools necessary to create a working environment focused on accomplishing our ESG objectives and believe that it is every employee’s responsibility to ensure that we operate with the highest regards toward ESG.”
“As we look to the remainder of 2021, we will continue to prioritize operational excellence and free cash flow generation. We have grown W&T through the right combination of attractive property acquisitions, methodical integration and exploitation of those acquisitions, and successful development and exploratory drilling on our legacy fields. We believe that market conditions in the Gulf remain very favorable for accretive acquisitions. Our improved balance sheet and strong cash flow generation have positioned W&T to actively pursue these opportunities. We also have favorable drilling opportunities within our legacy fields that we plan to drill or complete in the second half of 2021. With our
For the first quarter of 2021, W&T reported a net loss of
Adjusted EBITDA for the first quarter of 2021 totaled
Free Cash Flow for the first quarter of 2021 totaled
Adjusted Net (Loss) Income, Adjusted EBITDA and Free Cash Flow are non-GAAP financial measures, which are described in more detail and reconciled to the most comparable GAAP measures in the attached tables below under “Non-GAAP Information.”
Production, Prices and Revenues: Production for the first quarter of 2021 was 39,657 Boe/d or 3.6 MMBoe, an increase of
For the first quarter of 2021, W&T’s average realized crude oil sales price was
Revenues for the first quarter of 2021 increased
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
Derivative (Gain) Loss: In the first quarter of 2021, W&T recorded a net loss 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, as reported in the income statement, in the first quarter of 2021 was
Income Tax: W&T recorded an income tax benefit of
As of March 31, 2021, W&T’s deferred tax valuation allowance was
Balance Sheet, Cash Flow and Liquidity: Net cash provided by operating activities for the three months ended March 31, 2021 was
In January 2021, W&T’s bank group completed its regularly scheduled semi-annual borrowing base redetermination and the borrowing base was set at
Capital Expenditures: Per the Statement of Cash Flows, capital expenditures in the first quarter of 2021, excluding changes in working capital associated with investing activities, were
Environmental, Social and Governance (“ESG”) Commentary and COVID-19 Response
W&T issued its 2020 initial corporate ESG report in March 2021. The report has an in-depth review of W&T’s ESG initiatives as well as related key performance indicators. In the creation of its inaugural report, the Company consulted the Sustainability Accounting Standards Board’s (“SASB”) Oil and Gas Exploration and Production Sustainability Accounting Standard, the recommendations of the Task Force on Climate-related Financial Disclosures (“TCFD”), and other reporting guidance from industry frameworks and standards.
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 its corporate office, W&T instituted
For its field operations, the Company instituted screening, which includes a questionnaire and temperature check, of all personnel prior to entry into heliports and shorebases as well as its Alabama gas treatment plant. The Company conducts daily temperature screenings at all offshore facilities, implemented procedures for distancing and hygiene at its field locations, and provides COVID-19 testing for field project crews.
W&T will continue to monitor the COVID-19 situation and follow the advice of government and health advisors.
OPERATIONS UPDATE
W&T successfully drilled one well at East Cameron 338/349 in the first quarter of 2020, the Cota well, which 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. The well remains in the development phase of the project, with initial production expected in the latter part of 2021. The Company has an initial
Well Recompletions and Workovers: During the first quarter of 2021, the Company performed one recompletion and one workover that in total added approximately 400 net Boe/d to production. W&T currently plans to continue to perform recompletions and workovers that meet economic thresholds.
Consolidation of Onshore Natural Gas Treatment Plants Supporting Mobile Bay Assets: In January 2021, the Company completed the consolidation of its two onshore natural gas treatment facilities that service the Mobile Bay area into the Onshore Treating Facility (“OTF”) which was acquired in 2019 from ExxonMobil, and closed its Yellowhammer treatment facility. The OTF has more than sufficient capacity to meet W&T’s current and expected needs as it further develops its Mobile Bay and regional natural gas assets in the future. The consolidation of the facilities is expected to result in savings of approximately
Second Quarter and Full Year 2021 Production and Expense Guidance
The guidance for the second quarter and full year 2021 in the table below represents the Company’s current best estimate of the range of likely future results. Guidance could be affected by the factors described below in “Forward-Looking Statements”.
| Second Quarter | Full Year | |
| Production | 2021 | 2021 |
| Oil (MMBbls) | 1.26 - 1.39 | 4.97 - 5.57 |
| NGL’s (MMBbls) | 0.37 - 0.41 | 1.47 - 1.63 |
| Natural Gas (Bcf) | 11.0 - 12.2 | 44.4 - 49.0 |
| Total (MMBoe) | 3.5 - 3.8 | 13.8 - 15.4 |
| Total (Boe/d) | 38,500 - 42,500 | 38,000 - 42,000 |
| Operating Expenses | Second Quarter | Full Year |
| ($ in millions) | 2021 | 2021 |
| Lease operating expenses | ||
| Gathering, transportation & | ||
| production taxes | ||
| General & administrative | ||
| Current income tax expense rate | ||
Conference Call Information: W&T will hold a conference call to discuss its financial and operational results on Wednesday May 5, 2021, at 9:00 a.m. Central Time (10:00 a.m. Eastern Time). Interested parties may participate by dialing (844) 739-3797. International parties may dial (412) 317-5713. Participants should request to connect to the “W&T Offshore Conference Call.” This call will also be webcast and available on W&T’s website at www.wtoffshore.com under “Investors”. 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 42 producing fields in federal and state waters and has under lease approximately 709,000 gross acres, including approximately 500,000 gross acres on the Gulf of Mexico Shelf and approximately 209,000 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, 2020 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, | ||||||||||
| 2021 | 2020 | 2020 | ||||||||||
| Revenues: | ||||||||||||
| Oil | $ | 78,140 | $ | 54,535 | $ | 84,650 | ||||||
| NGLs | 9,359 | 6,267 | 6,452 | |||||||||
| Natural gas | 36,209 | 29,423 | 29,300 | |||||||||
| Other | 1,939 | 4,523 | 3,726 | |||||||||
| Total revenues | 125,647 | 94,748 | 124,128 | |||||||||
| Operating costs and expenses: | ||||||||||||
| Lease operating expenses | 42,357 | 43,332 | 54,775 | |||||||||
| Gathering, transportation costs and production taxes | 6,315 | 5,313 | 6,365 | |||||||||
| Depreciation, depletion, amortization and accretion | 26,637 | 26,547 | 39,126 | |||||||||
| General and administrative expenses | 10,712 | 7,678 | 13,963 | |||||||||
| Derivative loss (gain) | 24,578 | 11,529 | (61,912 | ) | ||||||||
| Total costs and expenses | 110,599 | 94,399 | 52,317 | |||||||||
| Operating income | 15,048 | 349 | 71,811 | |||||||||
| Interest expense, net | 15,034 | 15,402 | 17,110 | |||||||||
| Gain on debt transactions | - | - | (18,501 | ) | ||||||||
| Other expense, net | 963 | 752 | 723 | |||||||||
| (Loss) income before income tax (benefit) expense | (949 | ) | (15,805 | ) | 72,479 | |||||||
| Income tax (benefit) expense | (203 | ) | (6,858 | ) | 6,499 | |||||||
| Net (loss) income | $ | (746 | ) | $ | (8,947 | ) | $ | 65,980 | ||||
| Basic and diluted (loss) earnings per common share | $ | (0.01 | ) | $ | (0.06 | ) | $ | 0.46 | ||||
| Weighted average common shares outstanding | 142,151 | 141,721 | 141,546 | |||||||||
| W&T OFFSHORE, INC. AND SUBSIDIARIES | ||||||||||||
| Condensed Operating Data | ||||||||||||
| (Unaudited) | ||||||||||||
| Three Months Ended | ||||||||||||
| March 31, | December 31, | March 31, | ||||||||||
| 2021 | 2020 | 2020 | ||||||||||
| Net sales volumes: | ||||||||||||
| Oil (MBbls) | 1,377 | 1,273 | 1,827 | |||||||||
| NGL (MBbls) | 392 | 385 | 495 | |||||||||
| Oil and NGLs (MBbls) | 1,769 | 1,658 | 2,322 | |||||||||
| Natural gas (MMcf) | 10,799 | 11,174 | 15,307 | |||||||||
| Total oil and natural gas (MBoe) (1) | 3,569 | 3,520 | 4,873 | |||||||||
| Average daily equivalent sales (MBoe/d) | 39.7 | 38.3 | 53.6 | |||||||||
| Average realized sales prices: | ||||||||||||
| Oil ($/Bbl) | $ | 56.73 | $ | 42.84 | $ | 46.33 | ||||||
| NGLs ($/Bbl) | 23.88 | 16.30 | 13.03 | |||||||||
| Oil and NGLs ($/Bbl) | 49.45 | 36.68 | 39.23 | |||||||||
| Natural gas ($/Mcf) | 3.35 | 2.63 | 1.91 | |||||||||
| Barrel of oil equivalent ($/Boe) | 34.66 | 25.63 | 24.71 | |||||||||
| Average costs and expenses per Boe ($/Boe): | ||||||||||||
| Lease operating expenses | $ | 11.87 | $ | 12.31 | $ | 11.24 | ||||||
| Gathering, transportation costs and production taxes | 1.77 | 1.51 | 1.31 | |||||||||
| Depreciation, depletion, amortization and accretion | 7.46 | 7.54 | 8.03 | |||||||||
| General and administrative expenses | 3.00 | 2.18 | 2.87 | |||||||||
(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) | ||||||||
| (Unaudited) | ||||||||
| March 31, | December 31, | |||||||
| 2021 | 2020 | |||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 53,359 | $ | 43,726 | ||||
| Receivables: | ||||||||
| Oil and natural gas sales | 49,931 | 38,830 | ||||||
| Joint interest, net | 15,234 | 10,840 | ||||||
| Total receivables | 65,165 | 49,670 | ||||||
| Prepaid expenses and other assets | 15,350 | 13,832 | ||||||
| Total current assets | 133,874 | 107,228 | ||||||
| Oil and natural gas properties and other, net - at cost | 8,591,216 | 8,588,356 | ||||||
| Less accumulated depreciation, depletion, amortization and impairment | 7,922,247 | 7,901,478 | ||||||
| Oil and natural gas properties and other, net | 668,969 | 686,878 | ||||||
| Restricted deposits for asset retirement obligations | 29,699 | 29,675 | ||||||
| Deferred income taxes | 94,535 | 94,331 | ||||||
| Other assets | 22,613 | 22,470 | ||||||
| Total assets | $ | 949,690 | $ | 940,582 | ||||
| Liabilities and Shareholders’ Deficit | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 37,429 | $ | 41,304 | ||||
| Undistributed oil and natural gas proceeds | 25,338 | 19,167 | ||||||
| Advances from joint interest partners | 6,285 | 7,308 | ||||||
| Asset retirement obligations | 26,402 | 17,188 | ||||||
| Accrued liabilities | 64,573 | 30,033 | ||||||
| Total current liabilities | 160,027 | 115,000 | ||||||
| Long-term debt, net | 593,838 | 625,286 | ||||||
| Asset retirement obligations, less current portion | 372,495 | 375,516 | ||||||
| Other liabilities | 31,908 | 33,066 | ||||||
| Shareholders’ deficit: | ||||||||
| Common stock, | ||||||||
| outstanding at March 31, 2021 and at December 31, 2020 | ||||||||
| 1 | 1 | |||||||
| Additional paid-in capital | 550,793 | 550,339 | ||||||
| Retained deficit | (735,205 | ) | (734,459 | ) | ||||
| Treasury stock, at cost; 2,869 shares for both dates presented | (24,167 | ) | (24,167 | ) | ||||
| Total shareholders’ deficit | (208,578 | ) | (208,286 | ) | ||||
| Total liabilities and shareholders’ deficit | $ | 949,690 | $ | 940,582 | ||||
| W&T OFFSHORE, INC. AND SUBSIDIARIES | ||||||||||||
| Condensed Consolidated Statements of Cash Flows | ||||||||||||
| (In thousands) | ||||||||||||
| (Unaudited) | ||||||||||||
| Three Months Ended | ||||||||||||
| March 31, | December 31, | March 31, | ||||||||||
| 2021 | 2020 | 2020 | ||||||||||
| Operating activities: | ||||||||||||
| Net (loss) income | $ | (746 | ) | $ | (8,947 | ) | $ | 65,980 | ||||
| Adjustments to reconcile net (loss) income to net cash provided by operating activities: | ||||||||||||
| Depreciation, depletion, amortization and accretion | 26,637 | 26,547 | 39,126 | |||||||||
| Amortization of debt items and other items | 2,019 | 1,583 | 1,625 | |||||||||
| Share-based compensation | 454 | 817 | 1,048 | |||||||||
| Derivative loss (gain) | 24,578 | 11,529 | (61,912 | ) | ||||||||
| Derivative cash (payments) receipts, net | (4,604 | ) | 3,168 | 4,404 | ||||||||
| Gain on debt transactions | - | - | (18,501 | ) | ||||||||
| Deferred income taxes | (203 | ) | (6,880 | ) | 6,499 | |||||||
| Changes in operating assets and liabilities: | ||||||||||||
| Oil and natural gas receivables | (11,101 | ) | (17,423 | ) | 21,954 | |||||||
| Joint interest receivables | (4,394 | ) | (479 | ) | 7,123 | |||||||
| Prepaid expenses and other assets | (7,575 | ) | 1,612 | 11,011 | ||||||||
| Income taxes | - | 22 | - | |||||||||
| Asset retirement obligation settlements | (962 | ) | (551 | ) | (249 | ) | ||||||
| Cash advances from JV partners | (1,023 | ) | (414 | ) | 13,006 | |||||||
| Accounts payable, accrued liabilities and other | 21,884 | (16,813 | ) | (6,790 | ) | |||||||
| Net cash provided by (used in) operating activities | 44,964 | (6,229 | ) | 84,324 | ||||||||
| Investing activities: | ||||||||||||
| Investment in oil and natural gas properties and equipment | (1,575 | ) | (4,678 | ) | (9,542 | ) | ||||||
| Changes in operating assets and liabilities associated with investing activities | (1,758 | ) | 1,694 | (24,033 | ) | |||||||
| Acquisition of property interests | - | (2,463 | ) | (2,002 | ) | |||||||
| Purchases of furniture, fixtures and other | 2 | (460 | ) | (70 | ) | |||||||
| Net cash used in investing activities | (3,331 | ) | (5,907 | ) | (35,647 | ) | ||||||
| Financing activities: | ||||||||||||
| Repayments on credit facility | (32,000 | ) | - | (25,000 | ) | |||||||
| Purchase of Senior Second Lien Notes | - | - | (8,536 | ) | ||||||||
| Debt transactions costs and other | - | (670 | ) | - | ||||||||
| Net cash used in financing activities | (32,000 | ) | (670 | ) | (33,536 | ) | ||||||
| Increase (decrease) in cash and cash equivalents | 9,633 | (12,806 | ) | 15,141 | ||||||||
| Cash and cash equivalents, beginning of period | 43,726 | 56,532 | 32,433 | |||||||||
| Cash and cash equivalents, end of period | $ | 53,359 | $ | 43,726 | $ | 47,574 | ||||||
| W&T OFFSHORE, INC. AND SUBSIDIARIES | |||||||||||
| Financial Commodity Derivative Positions | |||||||||||
| As of May 4, 2021 | |||||||||||
| 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) | |||||||
| May 2021 - Dec 2021 | Swaps | 1,000 | |||||||||
| May 2021 - Dec 2021 | Swaps | 1,000 | |||||||||
| May 2021 - Dec 2021 | Swaps | 1,000 | |||||||||
| May 2021 - Dec 2021 | Swaps | 1,000 | |||||||||
| Jan 2022 - Feb 2022 | Swaps | 1,000 | |||||||||
| Jan 2022 - Feb 2022 | Swaps | 1,000 | |||||||||
| Jan 2022 - Feb 2022 | Swaps | 1,000 | |||||||||
| Mar 2022 - May 2022 | Swaps | 1,000 | |||||||||
| Mar - 2022 | Swaps | 1,076 | |||||||||
| Mar - 2022 1 | Swaps | 448 | |||||||||
| Apr - 2022 1 | Swaps | 670 | |||||||||
| Apr - 2022 | Swaps | 1,055 | |||||||||
| May - 2022 | Swaps | 1,000 | |||||||||
| May - 2022 1 | Swaps | 552 | |||||||||
| Jun - 2022 1 | Swaps | 2,583 | |||||||||
| Jul - 2022 1 | Swaps | 2,422 | |||||||||
| Aug - 2022 1 | Swaps | 2,335 | |||||||||
| Sep - 2022 1 | Swaps | 2,319 | |||||||||
| May 2021 - Dec 2021 1 | Costless Collars | 200 | |||||||||
| May - 2021 | Costless Collars | 1,944 | |||||||||
| May - 2021 1 | Costless Collars | 823 | |||||||||
| Jun - 2021 | Costless Collars | 1,924 | |||||||||
| Jun - 2021 1 | Costless Collars | 832 | |||||||||
| Jul - 2021 | Costless Collars | 1,525 | |||||||||
| Jul - 2021 1 | Costless Collars | 786 | |||||||||
| Aug - 2021 | Costless Collars | 1,346 | |||||||||
| Aug - 2021 1 | Costless Collars | 739 | |||||||||
| Sep - 2021 | Costless Collars | 1,350 | |||||||||
| Sep - 2021 1 | Costless Collars | 748 | |||||||||
| Oct - 2021 | Costless Collars | 1,012 | |||||||||
| Oct - 2021 1 | Costless Collars | 651 | |||||||||
| Nov - 2021 | Costless Collars | 948 | |||||||||
| Nov - 2021 1 | Costless Collars | 738 | |||||||||
| Dec - 2021 | Costless Collars | 625 | |||||||||
| Dec - 2021 1 | Costless Collars | 716 | |||||||||
| Jan - 2022 | Costless Collars | 1,473 | |||||||||
| Jan - 2022 1 | Costless Collars | 908 | |||||||||
| Feb - 2022 | Costless Collars | 1,790 | |||||||||
| Feb - 2022 1 | Costless Collars | 890 | |||||||||
| Mar 2022 - May 2022 | Costless Collars | 1,000 | |||||||||
| Mar 2022 - May 2022 | Costless Collars | 1,000 | |||||||||
| Mar - 2022 1 | Costless Collars | 448 | |||||||||
| Apr - 2022 1 | Costless Collars | 670 | |||||||||
| May - 2022 1 | Costless Collars | 552 | |||||||||
| Jun - 2022 1 | Costless Collars | 2,583 | |||||||||
| Jul - 2022 1 | Costless Collars | 2,422 | |||||||||
| Aug - 2022 1 | Costless Collars | 2,335 | |||||||||
| Sep - 2022 1 | Costless Collars | 2,319 | |||||||||
| Production Period | Instrument | Avg. Daily Volumes | Weighted Avg Swap Price | Weighted Avg Put Price | Weighted Avg Call Price | ||||||
| Natural Gas - Henry Hub NYMEX: | (MMBTU) | (per MMBTU) | (per MMBTU) | (per MMBTU) | |||||||
| May 2021 - Dec 2022 | Calls (long) | 40,000 | |||||||||
| May 2021 - Dec 2022 | Costless Collars | 40,000 | |||||||||
| May 2021 - Dec 2021 | Costless Collars | 20,000 | |||||||||
| May 2021 - Dec 2021 | Swaps | 10,000 | |||||||||
| May 2021 - Dec 2021 | Costless Collars | 10,000 | |||||||||
| Jan 2022 - Feb 2022 | Costless Collars | 30,000 | |||||||||
| Mar 2022 - May 2022 | Costless Collars | 10,000 | |||||||||
| Jan - 2022 | Swaps | 20,000 | |||||||||
| Feb - 2022 | Swaps | 30,000 | |||||||||
| Mar - 2022 | Swaps | 10,095 | |||||||||
| Apr - 2022 | Swaps | 11,571 | |||||||||
| May - 2022 1 | Swaps | 278 | |||||||||
| May - 2022 | Swaps | 10,000 | |||||||||
| Jun - 2022 1 | Swaps | 21,026 | |||||||||
| Jul - 2022 1 | Swaps | 17,733 | |||||||||
| Aug - 2022 1 | Swaps | 17,138 | |||||||||
| Sep - 2022 1 | Swaps | 18,473 | |||||||||
| (1) The Company entered into these derivative positions between January 1, 2021 and May 4, 2021. | |||||||||||
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 (Loss) Income”, “Adjusted EBITDA” and “Free Cash Flow”. Management uses these non-GAAP financial measures in its analysis of performance. 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 (Loss) Income to Adjusted Net (Loss) Income
Adjusted Net (Loss) Income does not include the unrealized commodity derivative loss (gain), amortization of derivative premium, bad debt reserve, deferred tax benefit, gain on debt transactions, and 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, | ||||||||||
| 2021 | 2020 | 2020 | ||||||||||
| (In thousands, except per share amounts) | ||||||||||||
| (Unaudited) | ||||||||||||
| Net (loss) income | $ | (746 | ) | $ | (8,947 | ) | $ | 65,980 | ||||
| Unrealized commodity derivative loss (gain) | 16,334 | 11,456 | (52,520 | ) | ||||||||
| Amortization of derivative premium | 456 | 1,483 | 4,349 | |||||||||
| Bad debt reserve | - | (1,063 | ) | 36 | ||||||||
| Deferred tax (benefit) expense | (203 | ) | (6,880 | ) | 6,499 | |||||||
| Gain on debt transactions | - | - | (18,501 | ) | ||||||||
| Litigation and other | 40 | (2,708 | ) | - | ||||||||
| Adjusted Net Income (Loss) | $ | 15,881 | $ | (6,659 | ) | $ | 5,843 | |||||
| Basic and diluted adjusted (loss) earnings per common share | $ | 0.11 | $ | (0.05 | ) | $ | 0.04 | |||||
| Weighted Average Shares Outstanding | 142,151 | 141,721 | 141,546 | |||||||||
W&T OFFSHORE, INC. AND SUBSIDIARIES
Non-GAAP Information
Adjusted EBITDA/ Free Cash Flow Reconciliations
The Company also presents the non-GAAP financial measures Adjusted EBITDA and Free Cash Flow. The Company defines Adjusted EBITDA as net (loss) 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, and litigation and other. Company management 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 Company defines Free Cash Flow as Adjusted EBITDA (defined above), less capital expenditures, plugging and abandonment costs and interest expense (all on an accrual basis). For this purpose, the Company’s definition of capital expenditures includes costs incurred related to oil and natural gas properties (such as drilling and infrastructure costs and the lease maintenance costs) and equipment, furniture and fixtures, but excludes acquisition costs of oil and gas properties from third parties that are not included in the Company’s capital expenditures guidance provided to investors. Company management believes that Free Cash Flow is an important financial performance measure for use in evaluating the performance and efficiency of its current operating activities after the impact of accrued capital expenditures, plugging and abandonment costs and interest expense and without being impacted by items such as changes associated with working capital, which can vary substantially from one period to another. There is no commonly accepted definition Free Cash Flow within the industry. Accordingly, Free Cash Flow, as defined and calculated by the Company, may not be comparable to Free Cash Flow or other similarly named non-GAAP measures reported by other companies. While the Company includes interest expense in the calculation of Free Cash Flow, other mandatory debt service requirements of future payments of principal at maturity (if such debt is not refinanced) are excluded from the calculation of Free Cash Flow. These and other non-discretionary expenditures that are not deducted from Free Cash Flow would reduce cash available for other uses.
The following tables present (i) a reconciliation of cash flow from operating activities, a GAAP measure, to Free Cash Flow, as defined by the Company and (ii) a reconciliation of the Company’s net (loss) income, a GAAP measure, to Adjusted EBITDA and Free Cash Flow, as such terms are defined by the Company.
| Three Months Ended | ||||||||||||
| March 31, | December 31, | March 31, | ||||||||||
| 2021 | 2020 | 2020 | ||||||||||
| (In thousands) | ||||||||||||
| (Unaudited) | ||||||||||||
| Net (loss) income | $ | (746 | ) | $ | (8,947 | ) | $ | 65,980 | ||||
| Interest expense, net | 15,034 | 15,402 | 17,110 | |||||||||
| Income tax benefit | (203 | ) | (6,858 | ) | 6,499 | |||||||
| Depreciation, depletion, amortization and accretion | 26,637 | 26,547 | 39,126 | |||||||||
| Unrealized commodity derivative loss (gain) | 16,334 | 11,456 | (52,520 | ) | ||||||||
| Amortization of derivative premium | 456 | 1,483 | 4,349 | |||||||||
| Bad debt reserve | - | (1,063 | ) | 36 | ||||||||
| Gain on debt transactions | - | - | (18,501 | ) | ||||||||
| Litigation and other | 40 | (2,708 | ) | - | ||||||||
| Adjusted EBITDA | $ | 57,552 | $ | 35,312 | $ | 62,079 | ||||||
| Investment in oil and natural gas properties and equipment | (1,575 | ) | (4,678 | ) | (9,542 | ) | ||||||
| Purchases of furniture, fixtures and other | 2 | (460 | ) | (70 | ) | |||||||
| Asset retirement obligation settlements | (962 | ) | (551 | ) | (249 | ) | ||||||
| Interest expense, net | (15,034 | ) | (15,402 | ) | (17,110 | ) | ||||||
| Free Cash Flow | $ | 39,983 | $ | 14,221 | $ | 35,108 | ||||||
| Three Months Ended | |||||||||||
| March 31, | December 31, | March 31, | |||||||||
| 2021 | 2020 | 2020 | |||||||||
| (In thousands) | |||||||||||
| (Unaudited) | |||||||||||
| Net cash provided by (used in) operating activities | $ | 44,964 | $ | (6,229 | ) | $ | 84,324 | ||||
| Bad debt reserve | - | (1,063 | ) | 36 | |||||||
| Litigation and other | 40 | (2,708 | ) | - | |||||||
| Amortization of debt items and other items | (2,019 | ) | (1,583 | ) | (1,625 | ) | |||||
| Share-based compensation | (454 | ) | (817 | ) | (1,048 | ) | |||||
| Current tax benefit (expense) (1) | - | 22 | - | ||||||||
| Changes in derivatives receivable (payable) (1) | (3,184 | ) | (1,758 | ) | 9,337 | ||||||
| Changes in operating assets and liabilities, excluding asset retirement obligation settlements | 2,209 | 33,495 | (46,304 | ) | |||||||
| Investment in oil and natural gas properties and equipment | (1,575 | ) | (4,678 | ) | (9,542 | ) | |||||
| Purchases of furniture, fixtures and other | 2 | (460 | ) | (70 | ) | ||||||
| Free Cash Flow | $ | 39,983 | $ | 14,221 | $ | 35,108 | |||||
| (1) A reconciliation of the adjustment used to calculate Free Cash Flow to the Condensed Consolidated Financial Statements is included below: | |||||||||||
| Current tax benefit: | |||||||||||
| Income tax (benefit) expense | $ | (203 | ) | $ | (6,858 | ) | $ | 6,499 | |||
| Less: Deferred income taxes | (203 | ) | (6,880 | ) | 6,499 | ||||||
| Current tax benefit (expense) | $ | - | $ | 22 | $ | - | |||||
| Changes in derivatives receivable: | |||||||||||
| Derivatives receivable (payable), end of period | $ | (3,465 | ) | $ | (281 | ) | $ | 9,682 | |||
| Derivatives receivable (payable), beginning of period | 281 | (1,477 | ) | (345 | ) | ||||||
| Change in derivatives receivable (payable) | $ | (3,184 | ) | $ | (1,758 | ) | $ | 9,337 | |||
| CONTACT: | Al Petrie | Janet Yang | |
| Investor Relations Coordinator | EVP & CFO | ||
| apetrie@wtoffshore.com | investorrelations@wtoffshore.com | ||
| 713-297-8024 | 713-624-7326 |
FAQ
What were WTI's production figures in Q1 2021?
What was WTI's net income for the first quarter of 2021?
How did WTI's Adjusted EBITDA perform in Q1 2021?
What is WTI's Free Cash Flow figure for Q1 2021?
How did commodity prices affect WTI's financial results in Q1 2021?
