W&T Offshore Announces Fourth Quarter and Full Year 2023 Results Including Year-End 2023 Proved Reserves, Provides Guidance for 2024, and Declares Dividend for First Quarter of 2024
- Completed two accretive acquisitions of producing properties totaling $99.4 million
- Generated strong production of 34.9 MBoe/d in 2023
- Reported net income of $15.6 million for full year 2023
- Delivered Adjusted EBITDA of $183.2 million in 2023
- Declared a dividend of $0.01 per share for Q1 2024
- None.
Insights
The reported financial results of W&T Offshore, Inc. show a mixed picture, with the company achieving a net income of $15.6 million for the full year 2023, which is a substantial decline from the previous year's net income of $231.1 million. This indicates a challenging environment, potentially due to lower commodity prices and decreased oil production, which are common sector-wide issues. The company's strategy of funding acquisitions with cash on hand rather than debt is noteworthy, as it suggests a conservative financial approach aimed at maintaining a low leverage profile, evidenced by a Net Debt to TTM Adjusted EBITDA ratio of 1.2 times.
W&T's focus on free cash flow generation has resulted in the 24th consecutive quarter of positive free cash flow, a strong indicator of operational efficiency and financial discipline. However, investors should be aware that Adjusted Net Loss for the year was $21.7 million, contrasting with the reported net income. This discrepancy is mainly due to the exclusion of unrealized gains on derivative contracts and other non-recurring costs, which may not reflect the company's ongoing operational performance.
Furthermore, the announcement of a consistent quarterly dividend policy might be viewed positively by investors seeking regular income, although the dividend amount of $0.01 per share may be considered nominal. The capital expenditure guidance for 2024 of $35 to $45 million suggests a continued focus on strategic investments while maintaining fiscal prudence.
The operational highlights, such as the completion of two accretive acquisitions, underline W&T's strategic intent to grow through consolidation of assets in the Gulf of Mexico (GOM). The acquisitions, which were made at approximately $4.75 per barrel of oil equivalent, are indicative of the company's ability to identify and secure value-accretive deals. The focus on properties with high working interest and net revenue interest suggests a strategy to optimize control over operations and revenue streams.
From a market perspective, W&T's approach to enhance production and reserves through operational excellence and acquisitions is significant. The company's emphasis on maintaining a balance between liquids and natural gas in its production mix reflects a response to market demand and price dynamics. The GOM assets' proximity to W&T's existing operations is expected to deliver synergies, potentially reducing operational costs and enhancing profitability.
However, the downward revisions in proved reserves due to SEC pricing and the increase in Lease Operating Expense (LOE) on a per Boe basis year-over-year could be areas of concern for investors. These factors might impact the company's cost efficiency and margin sustainability in the long-term.
The energy sector is characterized by volatility in commodity prices, which can significantly impact the financial performance of companies like W&T Offshore. The reported decrease in realized prices for oil, natural gas liquids (NGLs) and natural gas in the fourth quarter of 2023 compared to the same period in the previous year, reflects broader market trends and emphasizes the importance of cost management and operational efficiency in this sector.
W&T's strategic focus on the Gulf of Mexico is notable, as the region is known for its established infrastructure and relatively low-cost production compared to deepwater and unconventional onshore operations. The company's acquisition strategy in the GOM, particularly targeting shallow water fields, aligns with industry trends of pursuing lower-risk assets with known geology.
The potential exploration of a Drilling Joint Venture is a strategic move that could allow W&T to share operational risks and costs while leveraging its expertise in deepwater wells. This collaborative approach could enhance the company's ability to capitalize on high-impact opportunities in its portfolio without overextending its capital expenditure.
HOUSTON, March 05, 2024 (GLOBE NEWSWIRE) -- W&T Offshore, Inc. (NYSE: WTI) (“W&T” or the “Company”) today reported operational and financial results for the fourth quarter and full year 2023, including the Company’s year-end 2023 reserve report. Detailed guidance for the first quarter of 2024 and full year 2024 was also provided, and W&T announced its dividend for the first quarter of 2024. This press release includes non-GAAP financial measures, including Adjusted Net (Loss) Income, Adjusted EBITDA, Free Cash Flow, Net Debt and PV-10 which are described and reconciled to the most comparable GAAP measures below in the accompanying tables under “Non-GAAP Information.” Key highlights for the fourth quarter and full year 2023 and since year-end 2023 included:
- Completed two accretive acquisitions of producing properties for a total of
$99.4 million , or approximately$4.75 per barrel of oil equivalent (“Boe”);- Acquired six shallow water Gulf of Mexico (“GOM”) fields in January 2024 (“the Cox acquisition”), all of which are
100% working interest and located adjacent to existing W&T operations, for$72.0 million ; - Purchased working interests in eight shallow water GOM fields in September 2023 for
$27.4 million ; - Both acquisitions were funded with cash on hand, which increases proved reserves, production and Free Cash Flow per share;
- Acquired six shallow water Gulf of Mexico (“GOM”) fields in January 2024 (“the Cox acquisition”), all of which are
- Delivered strong production in full year 2023 of 34.9 thousand barrels of oil equivalent per day (“MBoe/d”) (
51% liquids), or 12.7 million barrels of oil equivalent (“MMBoe”), at the midpoint of latest guidance;- Production was 34.1 Mboe/d (
49% liquids), or 3.1 MMBoe in the fourth quarter of 2023;
- Production was 34.1 Mboe/d (
- Reported net income for full year 2023 of
$15.6 million , or$0.11 per diluted share and fourth quarter 2023 net loss of$0.4 million or ($0.00) per diluted share;- Adjusted Net Loss totaled
$21.7 million , or ($0.15) per share for full year 2023 and$8.7 million , or ($0.06) per share for the fourth quarter 2023, which excludes the net unrealized gain on outstanding derivative contracts, non-ARO plugging and abandonment (“P&A”) costs and non-recurring costs related to the Company’s IT services transition;
- Adjusted Net Loss totaled
- Generated solid Adjusted EBITDA in the fourth quarter 2023 of
$44.9 million and$183.2 million in full year 2023; - Produced net cash from operating activities of
$35.7 million and Free Cash Flow of$15.8 million in the fourth quarter 2023, marking the 24th consecutive quarter of positive Free Cash Flow;- In full year 2023, generated net cash from operating activities of
$115.3 million and$63.3 million of Free Cash Flow, further strengthening the balance sheet and allowing W&T to fund accretive acquisitions;
- In full year 2023, generated net cash from operating activities of
- Grew cash and cash equivalents to
$173.3 million at December 31, 2023 from$149.0 million at September 30,2023; - Reported Net Debt of
$217.3 million as of December 31, 2023, compared with Net Debt of$232.1 million a year ago; - Continued to maintain a low leverage profile with Net Debt to trailing twelve months (“TTM”) Adjusted EBITDA of 1.2 times;
- Adopted a quarterly cash dividend policy in November 2023 and paid initial dividend of
$0.01 per common share on December 22, 2023;- Declared first quarter 2024 dividend of
$0.01 per share which will be payable on March 25, 2024 to stockholders of record on March 18, 2024; and
- Declared first quarter 2024 dividend of
- Announced 2024 guidance including a capital spending budget of
$35 t o$45 million .
Tracy W. Krohn, W&T’s Board Chair and Chief Executive Officer, commented, “We continued to deliver solid results in 2023, while executing on our strategic vision focused on Free Cash Flow generation. We have reported 24 consecutive quarters of positive Free Cash Flow and generated Adjusted EBITDA of
Mr. Krohn continued, “Turning to our year-end reserve results, I would like to point out that the recent acquisition in January 2024, which added 18.7 MMBoe of proved reserves, is not reflected in these numbers. While the decline in SEC pricing led to downward revisions in proved reserves, we continue to see positive well performance resulting in positive technical revisions. This clearly demonstrates our ability to enhance production and reserves through operational excellence. In 2023, we had 4.0 MMBoe of positive performance revisions and an increase of 2.6 MMBoe related to the acquisition we closed in September. We have built a sustainable group of high performing GOM assets with good production diversity that is almost evenly distributed between liquids and natural gas. We expect that our assets and operational excellence will continue to provide meaningful cash flow to our shareholders for many years.”
Mr. Krohn concluded, “Looking at 2024 and beyond, we are integrating our recent acquisitions and believe that we can materially increase production and reduce costs at the 14 additional fields that we now operate. We are deferring some of our drilling plans while we complete the integration of those assets and are exploring a Drilling Joint Venture, similar to the Monza Energy LLC Joint Venture, which closed in 2018. The new drilling Joint Venture may include certain of the Company’s
Production, Prices, and Revenue: Production for the fourth quarter of 2023 was 34.1 MBoe/d compared with 35.9 Mboe/d for the third quarter of 2023 and 38.6 MBoe/d for the corresponding period in 2022. The small decrease in production compared to the third quarter of 2023 was primarily driven by natural decline and some unplanned downtime, which was partially offset by production optimization and workovers. Fourth quarter 2023 production was comprised of 13.3 MBbl/d of oil (
W&T’s average realized price per Boe before realized derivative settlements was
Revenues for the fourth quarter of 2023 were
Lease Operating Expense: Lease operating expense (“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 expense related to asset retirement obligations (“ARO”), was
General & Administrative Expenses (“G&A”): G&A was
Derivative (Gain) Loss: In the fourth quarter of 2023, W&T recorded a net gain of
As of December 31, 2023, W&T has 65.9 MMcf/d hedged for the first quarter of 2024 for natural gas and no existing hedges for oil. A significant portion of W&T’s natural gas hedges, in the form of sold swaps and purchased calls and puts, were entered into in conjunction with the non-recourse Mobile Bay term loan (the “Term Loan”) entered into by borrowers owned by the Company’s wholly-owned subsidiary Aquasition Energy LLC, with the terms of such hedges corresponding to the maturity of such Term Loan.
A summary of the Company’s outstanding derivative positions is provided in the investor presentation posted on W&T’s website.
Interest Expense: Net interest expense in the fourth quarter of 2023 was
Other (Income) Expense, net: During 2021 and 2022, as a result of the declaration of bankruptcy by a third party that is the indirect successor in title to certain offshore interests that were previously divested by the Company, W&T recorded a contingent loss accrual related to anticipated ARO. During the fourth quarter of 2023, the Company reassessed the existing ARO, recording an additional
Income Tax: W&T recognized income tax expense of
Balance Sheet and Liquidity: As of December 31, 2023, W&T had available liquidity of
Capital Expenditures: Capital expenditures (excluding acquisitions and changes in working capital associated with investing activities) in the fourth quarter of 2023 were
Accretive Acquisitions of Producing Properties in the GOM
In January 2024, W&T was the successful bidder for six fields in the Gulf of Mexico, including Eugene Island 064, Main Pass 061, Mobile 904, Mobile 916, South Pass 049 and West Delta 073, all of which include a
- Adds significant proved reserves of 18.7 MMBoe1 (
62% liquids) with a present value discounted at10% (“PV-10”) value of$250.4 million based on an independent engineering report prepared by Netherland Sewell and Associates (“NSAI”); - Based on the cash consideration paid of
$72 million , this equates to a price of$3.85 per Boe of proved reserves; - As it has done after prior acquisitions, W&T is assessing, inspecting and optimizing the newly acquired fields, which requires shutting in some of the fields in the near term;
- Field logistics are being examined to see if more cost-effective tie-ins and throughput can be done with existing W&T facilities adjacent to the newly acquired fields; and
- The Company believes that it will increase production on these properties through workovers, recompletions and facility upgrades.
In September 2023, the Company announced that it had completed the acquisition of working interests in eight shallow water oil and gas producing assets in the central and eastern shelf region of the GOM from an undisclosed private seller. The assets were acquired for a gross consideration of
____________________
1 Reserves as of January 1, 2024 using year-end 2023 SEC pricing.
Full Year-End 2023 Financial Review
W&T reported net income for the full year 2023 of
Production for 2023 averaged 34.9 MBoe/d for a total of 12.7 MMBoe, comprised of 5.1 MMBbl of oil, 1.4 MMBbl of NGLs and 37.6 Bcf of natural gas. Full year 2022 production averaged 40.1 MBoe/d or 14.6 MMBoe in total and was comprised of 5.6 MMBbl of oil, 1.6 MMBbl of NGLs and 44.8 Bcf of natural gas.
For the full year 2023, W&T’s average realized sales price per barrel of crude oil was
For the full year 2023, LOE was
Gathering, transportation, and production taxes totaled
For the full year 2023, G&A was
OPERATIONS UPDATE
Well Recompletions and Workovers
During the fourth quarter of 2023, the Company performed four workovers and three recompletions that positively impacted production for the quarter. W&T plans to continue performing these low cost, short payout operations that impact both production and revenue.
Year-End 2023 Proved Reserves
The Company’s year-end 2023 SEC proved reserves were 123.0 MMBoe, compared with 165.3 MMBoe at year-end 2022. The W&T year-end 2023 proved reserves do not include the 18.7 MMBoe of proved reserves acquired in early January 2024 for
The SEC twelve-month first day of the month average spot prices used in the preparation of the report for year-end 2023 were
Approximately
| Summary Reconciliation of Proved Reserves | ||||||||||
| Oil | NGL | Natural Gas | Equivalents | PV-101 | ||||||
| MMBbl | MMBbl | Bcf | MMBoe | $MM | ||||||
| Balance, December 31, 2022 | 40.6 | 18.9 | 634.6 | 165.3 | ||||||
| Revisions of previous estimates | 3.1 | 0.5 | 2.4 | 4.0 | ||||||
| Revisions due to SEC price change | (3.1) | (4.6) | (171.2) | (36.2) | ||||||
| Extensions & discoveries | -- | -- | -- | -- | ||||||
| Purchases of minerals in place | 1.4 | 0.3 | 5.9 | 2.6 | ||||||
| Sales of minerals in place | -- | -- | -- | -- | ||||||
| Production | (5.1) | (1.4) | (37.6) | (12.7) | ||||||
| Balance, December 31, 2023 | 37.0 | 13.7 | 434.0 | 123.0 | ||||||
| (1) PV-10 for this presentation excludes any provision for asset retirement obligations or income taxes. | ||||||||||
In accordance with guidelines established by the SEC, estimated proved reserves as of December 31, 2023 were determined to be economically producible under existing economic conditions, which requires the use of the 12-month average of the first-day-of-the-month price for the year ended December 31, 2023. The WTI spot price and the Henry Hub spot price were utilized as the reference prices and after adjusting for quality, transportation, fees, energy content, and regional price differentials, the average realized prices were
The standardized measure of future net cash flows was
Pro-forma Impact of Cox Acquisition
As noted above, the proved reserves added from the acquisition of six fields from Cox in January 2024 were not included in W&T’s year-end 2023 proved reserves. Below is the pro-forma impact of adding those reserves as of December 31, 2023, which were calculated by NSAI using the same pricing assumptions as W&T’s year-end 2023 reserves:
| Oil | NGL | Natural Gas | Equivalents | PV-101 | ||
| MMBbl | MMBbl | Bcf | MMBoe | $MM | ||
| Balance, December 31, 2023 | 37.0 | 13.7 | 434.0 | 123.0 | ||
| Proved reserves from Cox acquisition | 11.4 | 0.2 | 42.4 | 18.7 | ||
| Pro forma reserve balance, December 31, 2023 including Cox acquisition | 48.4 | 13.9 | 476.4 | 141.7 | ||
Cash Dividend Policy
In the fourth quarter of 2023, the Board of Directors approved a quarterly cash dividend policy with the initial dividend of
First Quarter and Full Year 2024 Production and Expense Guidance
Looking ahead to 2024, Tracy Krohn commented, “In the first quarter of 2024, we completed an accretive acquisition of six GOM fields as a result of being the high bidder in a bankruptcy proceeding. We are actively assessing the capabilities of these fields, inspecting their needs and current condition and plan to optimize production with capital-efficient, low-cost workovers, recompletions and facility upgrades during 2024. This will take some time and effort by our operations personnel and will result in us shutting in some of the fields in the near term. With that said, our highly successful track record of integrating acquisitions while increasing production and value gives me the confidence that we will be able to accomplish this with the recent acquisitions. Taking into consideration the integration of the new assets and associated ramp-up of production, we believe that we will be able to show meaningful growth in production by year-end 2024. In addition, given our recent acquisitions and the current acquisition opportunities in the Gulf of Mexico, we have decided to defer the drilling of our Holy Grail well until 2025, which will reduce our drilling and capital investment plans for 2024 to between
The guidance for the first quarter and full year 2024 in the table below represents the Company’s current expectations. Please refer to the section entitled “Forward-Looking and Cautionary Statements” below for risk factors that could impact guidance.
| Production | First Quarter 2024 | Full Year 2024 |
| Oil (MBbl) | 1,250 - 1,400 | 5,100 – 5,800 |
| NGLs (MBbl) | 285 – 315 | 1,150 – 1,375 |
| Natural gas (MMcf) | 8,500 – 9,500 | 37,000 – 44,500 |
| Total equivalents (MBoe) | 2,952 – 3,298 | 12,417 – 14,592 |
| Average daily equivalents (MBoe/d) | 32.4 – 36.2 | 33.9 – 39.9 |
| Expenses | First Quarter 2024 | Full Year 2024 |
| Lease operating expense ($MM) | 77.5 – 86.0 | 295.0 – 332.0 |
| Gathering, transportation & production taxes ($MM) | 7.9 – 8.8 | 34.5 – 39.0 |
| General & administrative – cash ($MM) | 15.0 – 17.0 | 59.0 – 66.5 |
| General & administrative – non-cash ($MM) | 2.6 – 3.0 | 12.5 – 14.0 |
| DD&A ($ per Boe) | 11.4 – 12.9 | |
W&T expects substantially all taxes in 2024 to be deferred.
2024 Capital Investment Program
W&T’s capital expenditure budget for 2024 is expected to be in the range of
Plugging and abandonment expenditures are expected to be in the range of
Conference Call Information: W&T will hold a conference call to discuss its financial and operational results on Wednesday, March 6, 2024 at 9:00 a.m. Central Time (10:00 Eastern Time). Interested parties may dial 1-844-739-3797. International parties may dial 1-412-317-5713. 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. As of December 31, 2023, the Company had working interests in 53 fields in federal and state waters (which include 44 fields in federal waters and nine in state waters). The Company has under lease approximately 597,100 gross acres (440,000 net acres) spanning across the outer continental shelf off the coasts of Louisiana, Texas, Mississippi and Alabama, with approximately 435,600 gross acres on the conventional shelf, approximately 153,500 gross acres in the deepwater and 8,000 gross acres in Alabama state waters. 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. All statements other than statements of historical facts included in this release regarding the Company’s financial position, operating and financial performance, business strategy, plans and objectives of management for future operations, projected costs, industry conditions, potential acquisitions, the impact of and integration of acquired assets, and indebtedness are forward-looking statements. When used in this release, forward-looking statements are generally accompanied by terms or phrases such as “estimate,” “project,” “predict,” “believe,” “expect,” “continue,” “anticipate,” “target,” “could,” “plan,” “intend,” “seek,” “goal,” “will,” “should,” “may” or other words and similar expressions that convey the uncertainty of future events or outcomes, although not all forward-looking statements contain such identifying words. Items contemplating or making assumptions about actual or potential future production and sales, prices, market size, and trends or operating results also constitute such forward-looking statements.
These forward-looking statements are based on the Company’s current expectations and assumptions about future events and speak only as of the date of this release. While management considers these expectations and assumptions to be reasonable, they are inherently subject to significant business, economic, competitive, regulatory and other risks, contingencies and uncertainties, most of which are difficult to predict and many of which are beyond the Company’s control. Accordingly, you are cautioned not to place undue reliance on these forward-looking statements, as results actually achieved may differ materially from expected results described in these statements. The Company does not undertake, and specifically disclaims, any obligation to update any forward-looking statements to reflect events or circumstances occurring after the date of such statements, unless required by law.
Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially including, among other things, the regulatory environment, including availability or timing of, and conditions imposed on, obtaining and/or maintaining permits and approvals, including those necessary for drilling and/or development projects; the impact of current, pending and/or future laws and regulations, and of legislative and regulatory changes and other government activities, including those related to permitting, drilling, completion, well stimulation, operation, maintenance or abandonment of wells or facilities, managing energy, water, land, greenhouse gases or other emissions, protection of health, safety and the environment, or transportation, marketing and sale of the Company’s products; inflation levels; global economic trends, geopolitical risks and general economic and industry conditions, such as the global supply chain disruptions and the government interventions into the financial markets and economy in response to inflation levels and world health events; volatility of oil, NGL and natural gas prices; the global energy future, including the factors and trends that are expected to shape it, such as concerns about climate change and other air quality issues, the transition to a low-emission economy and the expected role of different energy sources; supply of and demand for oil, natural gas and NGLs, including due to the actions of foreign producers, importantly including OPEC and other major oil producing companies (“OPEC Plus”) and change in OPEC Plus’s production levels; disruptions to, capacity constraints in, or other limitations on the pipeline systems that deliver the Company’s oil and natural gas and other processing and transportation considerations; inability to generate sufficient cash flow from operations or to obtain adequate financing to fund capital expenditures, meet the Company’s working capital requirements or fund planned investments; price fluctuations and availability of natural gas and electricity; the Company’s ability to use derivative instruments to manage commodity price risk; the Company’s ability to meet the Company’s planned drilling schedule, including due to the Company’s ability to obtain permits on a timely basis or at all, and to successfully drill wells that produce oil and natural gas in commercially viable quantities; uncertainties associated with estimating proved reserves and related future cash flows; the Company’s ability to replace the Company’s reserves through exploration and development activities; drilling and production results, lower–than–expected production, reserves or resources from development projects or higher–than–expected decline rates; the Company’s ability to obtain timely and available drilling and completion equipment and crew availability and access to necessary resources for drilling, completing and operating wells; changes in tax laws; effects of competition; uncertainties and liabilities associated with acquired and divested assets; the Company’s ability to make acquisitions and successfully integrate any acquired businesses; asset impairments from commodity price declines; large or multiple customer defaults on contractual obligations, including defaults resulting from actual or potential insolvencies; geographical concentration of the Company’s operations; the creditworthiness and performance of the Company’s counterparties with respect to its hedges; impact of derivatives legislation affecting the Company’s ability to hedge; failure of risk management and ineffectiveness of internal controls; catastrophic events, including tropical storms, hurricanes, earthquakes, pandemics and other world health events; environmental risks and liabilities under U.S. federal, state, tribal and local laws and regulations (including remedial actions); potential liability resulting from pending or future litigation; the Company’s ability to recruit and/or retain key members of the Company’s senior management and key technical employees; information technology failures or cyberattacks; and governmental actions and political conditions, as well as the actions by other third parties that are beyond the Company’s control, and other factors discussed in W&T Offshore’s most recent Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q found at www.sec.gov or at the Company’s website at www.wtoffshore.com under the Investor Relations section.
| W&T OFFSHORE, INC. | ||||||||||||||||||||
| Consolidated Statements of Operations | ||||||||||||||||||||
| (In thousands, except per share data) | ||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||
| Three Months Ended | Year Ended | |||||||||||||||||||
| December 31, | September 30, | December 31, | December 31, | |||||||||||||||||
| 2023 | 2023 | 2022 | 2023 | 2022 | ||||||||||||||||
| Revenues: | ||||||||||||||||||||
| Oil | $ | 94,076 | $ | 100,331 | $ | 111,748 | $ | 381,389 | $ | 524,274 | ||||||||||
| NGLs | 6,851 | 7,415 | 9,534 | 32,446 | 56,964 | |||||||||||||||
| Natural gas | 29,401 | 32,515 | 66,379 | 110,158 | 323,831 | |||||||||||||||
| Other | 2,012 | 2,150 | 2,039 | 8,663 | 15,928 | |||||||||||||||
| Total revenues | 132,340 | 142,411 | 189,700 | 532,656 | 920,997 | |||||||||||||||
| Operating expenses: | ||||||||||||||||||||
| Lease operating expenses | 64,643 | 61,826 | 69,017 | 257,676 | 224,414 | |||||||||||||||
| Gathering, transportation and production taxes | 6,620 | 6,692 | 8,481 | 26,250 | 35,128 | |||||||||||||||
| Depreciation, depletion, and amortization | 33,658 | 30,218 | 27,274 | 114,677 | 107,122 | |||||||||||||||
| Asset retirement obligations accretion | 7,377 | 6,414 | 6,972 | 29,018 | 26,508 | |||||||||||||||
| General and administrative expenses | 18,251 | 19,978 | 21,957 | 75,541 | 73,747 | |||||||||||||||
| Total operating expenses | 130,549 | 125,128 | 133,701 | 503,162 | 466,919 | |||||||||||||||
| Operating income | 1,791 | 17,283 | 55,999 | 29,494 | 454,078 | |||||||||||||||
| Interest expense, net | 9,729 | 9,925 | 14,526 | 44,689 | 69,441 | |||||||||||||||
| Derivative (gain) loss, net | (13,199 | ) | (1,491 | ) | (24,359 | ) | (54,759 | ) | 85,533 | |||||||||||
| Other expense, net | 3,772 | 1,927 | 15,524 | 5,621 | 14,295 | |||||||||||||||
| Income before income taxes | 1,489 | 6,922 | 50,308 | 33,943 | 284,809 | |||||||||||||||
| Income tax expense | 1,932 | 4,777 | 6,859 | 18,345 | 53,660 | |||||||||||||||
| Net (loss) income | $ | (443 | ) | $ | 2,145 | $ | 43,449 | $ | 15,598 | $ | 231,149 | |||||||||
| Basic | $ | — | $ | 0.01 | $ | 0.30 | $ | 0.11 | $ | 1.61 | ||||||||||
| Diluted | — | 0.01 | 0.30 | 0.11 | 1.59 | |||||||||||||||
| Weighted average common shares outstanding | ||||||||||||||||||||
| Basic | 146,578 | 146,483 | 143,490 | 146,483 | 143,143 | |||||||||||||||
| Diluted | 146,578 | 151,459 | 146,260 | 148,302 | 145,090 | |||||||||||||||
| W&T OFFSHORE, INC. | ||||||||||||||||
| Condensed Operating Data | ||||||||||||||||
| (Unaudited) | ||||||||||||||||
| Three Months Ended | Year Ended | |||||||||||||||
| December 31, | September 30, | December 31, | December 31, | |||||||||||||
| 2023 | 2023 | 2022 | 2023 | 2022 | ||||||||||||
| Net sales volumes: | ||||||||||||||||
| Oil (MBbls) | 1,219 | 1,227 | 1,375 | 5,050 | 5,602 | |||||||||||
| NGLs (MBbls) | 329 | 348 | 371 | 1,415 | 1,554 | |||||||||||
| Natural gas (MMcf) | 9,533 | 10,359 | 10,843 | 37,591 | 44,808 | |||||||||||
| Total oil and natural gas (MBoe) (1) | 3,136 | 3,302 | 3,553 | 12,730 | 14,624 | |||||||||||
| Average daily equivalent sales (MBoe/d) | 34.1 | 35.9 | 38.6 | 34.9 | 40.1 | |||||||||||
| Average realized sales prices (before the impact of derivative settlements): | ||||||||||||||||
| Oil ($/Bbl) | $ | 77.17 | $ | 81.77 | $ | 81.27 | $ | 75.52 | $ | 93.59 | ||||||
| NGLs ($/Bbl) | 20.82 | 21.31 | 25.70 | 22.93 | 36.66 | |||||||||||
| Natural gas ($/Mcf) | 3.08 | 3.14 | 6.12 | 2.93 | 7.23 | |||||||||||
| Barrel of oil equivalent ($/Boe) | 41.55 | 42.48 | 52.82 | 41.16 | 61.89 | |||||||||||
| Average operating expenses per Boe ($/Boe): | ||||||||||||||||
| Lease operating expenses | $ | 20.61 | $ | 18.72 | $ | 19.42 | $ | 20.24 | $ | 15.35 | ||||||
| Gathering, transportation and production taxes | 2.11 | 2.03 | 2.39 | 2.06 | 2.40 | |||||||||||
| Depreciation, depletion, and amortization | 10.73 | 9.15 | 7.68 | 9.01 | 7.33 | |||||||||||
| Asset retirement obligations accretion | 2.35 | 1.94 | 1.96 | 2.28 | 1.81 | |||||||||||
| General and administrative expenses | 5.82 | 6.05 | 6.18 | 5.93 | 5.04 | |||||||||||
| (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. The realized prices presented above are volume-weighted for production in the respective period. | ||||||||||||||||
| W&T OFFSHORE, INC. | |||||||||
| Consolidated Balance Sheets | |||||||||
| (In thousands) | |||||||||
| (Unaudited) | |||||||||
| December 31, | |||||||||
| 2023 | 2022 | ||||||||
| Assets | |||||||||
| Current assets: | |||||||||
| Cash and cash equivalents | $ | 173,338 | $ | 461,357 | |||||
| Restricted cash | 4,417 | 4,417 | |||||||
| Receivables: | |||||||||
| Oil and natural gas sales | 52,080 | 66,146 | |||||||
| Joint interest, net | 15,480 | 14,000 | |||||||
| Other | 2,218 | — | |||||||
| Prepaid expenses and other assets | 17,447 | 24,343 | |||||||
| Total current assets | 264,980 | 570,263 | |||||||
| Oil and natural gas properties and other, net | 749,056 | 735,215 | |||||||
| Restricted deposits for asset retirement obligations | 22,272 | 21,483 | |||||||
| Deferred income taxes | 38,774 | 57,280 | |||||||
| Other assets | 38,923 | 47,549 | |||||||
| Total assets | $ | 1,114,005 | $ | 1,431,790 | |||||
| Liabilities and Shareholders’ Equity | |||||||||
| Current liabilities: | |||||||||
| Accounts payable | $ | 78,857 | $ | 65,158 | |||||
| Accrued liabilities | 31,879 | 74,041 | |||||||
| Undistributed oil and natural gas proceeds | 42,134 | 41,934 | |||||||
| Advances from joint interest partners | 2,962 | 3,181 | |||||||
| Income tax payable | 99 | 412 | |||||||
| Current portion of asset retirement obligation | 31,553 | 25,359 | |||||||
| Current portion of long-term debt, net | 29,368 | 582,249 | |||||||
| Total current liabilities | 216,852 | 792,334 | |||||||
| Asset retirement obligations | 467,262 | 441,071 | |||||||
| Long-term debt, net | 361,236 | 111,188 | |||||||
| Deferred income taxes | 51 | 72 | |||||||
| Other liabilities | 19,369 | 59,134 | |||||||
| Commitments and contingencies | 18,043 | 20,357 | |||||||
| Shareholders’ equity: | |||||||||
| Preferred stock, | — | — | |||||||
| Common stock, | 1 | 1 | |||||||
| Additional paid-in capital | 586,014 | 576,588 | |||||||
| Retained deficit | (530,656 | ) | (544,788 | ) | |||||
| Treasury stock, at cost; 2,869 shares | (24,167 | ) | (24,167 | ) | |||||
| Total shareholders’ equity | 31,192 | 7,634 | |||||||
| Total liabilities and shareholders’ equity | $ | 1,114,005 | $ | 1,431,790 | |||||
| W&T OFFSHORE, INC. | |||||||||||||||||||||
| Consolidated Statements of Cash Flows | |||||||||||||||||||||
| (In thousands) | |||||||||||||||||||||
| (Unaudited) | |||||||||||||||||||||
| Three Months Ended | Year Ended | ||||||||||||||||||||
| December 31, | September 30, | December 31, | December 31, | ||||||||||||||||||
| 2023 | 2023 | 2022 | 2023 | 2022 | |||||||||||||||||
| Operating activities: | |||||||||||||||||||||
| Net (loss) income | $ | (443 | ) | $ | 2,145 | $ | 43,449 | $ | 15,598 | $ | 231,149 | ||||||||||
| Adjustments to reconcile net (loss) income to net cash provided by operating activities: | |||||||||||||||||||||
| Depreciation, depletion, amortization and accretion | 41,035 | 36,632 | 34,246 | 143,695 | 133,630 | ||||||||||||||||
| Share-based compensation | 3,124 | 3,250 | 2,743 | 10,383 | 7,922 | ||||||||||||||||
| Amortization and write off of debt issuance costs | 1,266 | 1,351 | 1,437 | 6,980 | 7,551 | ||||||||||||||||
| Derivative (gain) loss | (13,199 | ) | (1,491 | ) | (24,359 | ) | (54,759 | ) | 85,533 | ||||||||||||
| Derivative cash payments, net | (2,809 | ) | (1,696 | ) | (40,858 | ) | (8,932 | ) | (41,880 | ) | |||||||||||
| Derivative cash premium payments | — | — | — | — | (46,111 | ) | |||||||||||||||
| Deferred income taxes | 3,838 | 3,067 | 5,013 | 18,485 | 45,184 | ||||||||||||||||
| Changes in operating assets and liabilities: | |||||||||||||||||||||
| Oil and natural gas receivables | (3,558 | ) | (7,180 | ) | 23,049 | 14,066 | (11,227 | ) | |||||||||||||
| Joint interest receivables | 569 | (2,174 | ) | 2,815 | (1,480 | ) | (4,255 | ) | |||||||||||||
| Prepaid expenses and other current assets | (28,262 | ) | (1,442 | ) | 58,722 | (2,712 | ) | 31,906 | |||||||||||||
| Accounts payable, accrued liabilities and other | 45,197 | 8,937 | (77,600 | ) | 10,722 | (12,034 | ) | ||||||||||||||
| Cash advances from JV partners | (145 | ) | (3 | ) | 163 | (219 | ) | (11,892 | ) | ||||||||||||
| Income taxes | (1,897 | ) | 1,711 | (1,201 | ) | (2,531 | ) | 279 | |||||||||||||
| Asset retirement obligation settlements | (9,052 | ) | (13,077 | ) | (14,940 | ) | (33,970 | ) | (76,225 | ) | |||||||||||
| Net cash provided by operating activities | 35,664 | 30,030 | 12,679 | 115,326 | 339,530 | ||||||||||||||||
| Investing activities: | |||||||||||||||||||||
| Investment in oil and natural gas properties and equipment | (10,319 | ) | (7,960 | ) | (11,666 | ) | (41,278 | ) | (41,632 | ) | |||||||||||
| Changes in operatings assets and liabilities associated with investing activities | (1,820 | ) | 3,623 | 6,343 | (535 | ) | (1,894 | ) | |||||||||||||
| Acquisition of property interests | 1,479 | (28,863 | ) | — | (27,384 | ) | (51,474 | ) | |||||||||||||
| Deposit related to acquisition of property interests | 8,850 | (8,850 | ) | — | — | — | |||||||||||||||
| Purchase of corporate aircraft | — | — | — | (8,983 | ) | — | |||||||||||||||
| Purchases of furniture, fixtures and other | (347 | ) | (2,863 | ) | (80 | ) | (3,428 | ) | (80 | ) | |||||||||||
| Net cash used in investing activities | (2,157 | ) | (44,913 | ) | (5,403 | ) | (81,608 | ) | (95,080 | ) | |||||||||||
| Financing activities: | |||||||||||||||||||||
| Repayment of | — | — | (9,122 | ) | (552,460 | ) | — | ||||||||||||||
| Repayment of Term Loan | (7,412 | ) | (7,148 | ) | — | (33,741 | ) | (42,959 | ) | ||||||||||||
| Repayment of TVPX Loan | (275 | ) | (275 | ) | — | (733 | ) | — | |||||||||||||
| Proceeds from issuance of | — | — | — | 275,000 | — | ||||||||||||||||
| Debt issuance costs | — | (128 | ) | 331 | (7,380 | ) | (1,675 | ) | |||||||||||||
| Net proceeds from issuance of common stock | — | — | 16,458 | — | 16,458 | ||||||||||||||||
| Payment of dividends | (1,466 | ) | — | — | (1,466 | ) | — | ||||||||||||||
| Other | (9 | ) | (200 | ) | (716 | ) | (957 | ) | (716 | ) | |||||||||||
| Net cash used in financing activities | (9,162 | ) | (7,751 | ) | 6,951 | (321,737 | ) | (28,892 | ) | ||||||||||||
| Change in cash, cash equivalents and restricted cash | 24,345 | (22,634 | ) | 14,227 | (288,019 | ) | 215,558 | ||||||||||||||
| Cash, cash equivalents and restricted cash, beginning of period | 153,410 | 176,044 | 451,547 | 465,774 | 250,216 | ||||||||||||||||
| Cash, cash equivalents and restricted cash, end of period | $ | 177,755 | $ | 153,410 | $ | 465,774 | $ | 177,755 | $ | 465,774 | |||||||||||
| 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 “Net Debt”, “Adjusted Net (Loss) Income”, “Adjusted EBITDA,” “Free Cash Flow” and “PV-10” or are derivable from a combination of these measures. 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. Prior period amounts have been conformed to the methodology and presentation of the current period.
We calculate Net Debt as total debt (current and long-term portions), less cash and cash equivalents. Management uses Net Debt to evaluate the Company’s financial position, including its ability to service its debt obligations.
| Reconciliation of Net (Loss) Income to Adjusted Net (Loss) Income |
Adjusted Net (Loss) Income adjusts for certain items that the Company believes affect comparability of operating results, including items that are generally non-recurring in nature or whose timing and/or amount cannot be reasonably estimated. These items include unrealized commodity derivative (gain) loss net of derivative premiums, allowance for credit losses, write-off of debt issuance costs, non-recurring IT-transition costs, non-ARO plugging and abandonment costs, and other which are then tax effected using the Federal Statutory Rate.
| Three Months Ended | Year Ended | ||||||||||||||||||||
| December 31, | September 30, | December 31, | December 31, | ||||||||||||||||||
| 2023 | 2023 | 2022 | 2023 | 2022 | |||||||||||||||||
| (in thousands) | |||||||||||||||||||||
| (Unaudited) | |||||||||||||||||||||
| Net (loss) income | $ | (443 | ) | $ | 2,145 | $ | 43,449 | $ | 15,598 | $ | 231,149 | ||||||||||
| Unrealized commodity derivative (gain) loss and effect of derivative premiums, net | (14,785 | ) | (3,462 | ) | (53,132 | ) | (58,846 | ) | 45,475 | ||||||||||||
| Allowance for credit losses | 28 | 6 | 43 | 37 | (76 | ) | |||||||||||||||
| Write-off debt issuance costs | — | — | — | 2,330 | — | ||||||||||||||||
| Non-recurring costs related to IT services transition | 413 | 768 | 1,844 | 3,044 | 8,237 | ||||||||||||||||
| Non-ARO P&A costs | 4,137 | 2,103 | 15,899 | 6,246 | 18,402 | ||||||||||||||||
| Other | (240 | ) | 187 | (372 | ) | 31 | (4,104 | ) | |||||||||||||
| Tax effect of selected items(1) | 2,194 | 84 | 7,501 | 9,903 | (14,266 | ) | |||||||||||||||
| Adjusted net (loss) income | $ | (8,696 | ) | $ | 1,831 | $ | 15,232 | $ | (21,657 | ) | $ | 284,817 | |||||||||
| Adjusted net (loss) income per common share: | |||||||||||||||||||||
| Basic | $ | (0.06 | ) | $ | 0.01 | $ | 0.11 | $ | (0.15 | ) | $ | 1.99 | |||||||||
| Diluted | $ | (0.06 | ) | $ | 0.01 | $ | 0.10 | $ | (0.15 | ) | $ | 1.96 | |||||||||
| Weighted average shares outstanding: | |||||||||||||||||||||
| Basic | 146,578 | 146,483 | 143,490 | 146,483 | 143,143 | ||||||||||||||||
| Diluted | 146,578 | 151,459 | 146,260 | 146,483 | 145,090 | ||||||||||||||||
| (1) Selected items were tax effected with the Federal Statutory Rate of | |||||||||||||||||||||
| 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 income (loss) plus net interest expense, income tax expense, depreciation, depletion and amortization, ARO accretion, excluding the unrealized commodity derivative (gain) loss net of derivative premiums, allowance for credit losses, non-cash incentive compensation, non-recurring IT-transition costs, non-ARO plugging and abandonment costs, 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 net 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 net 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 of 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 net 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.
| Three Months Ended | Year Ended | ||||||||||||||||||||
| December 31, | September 31, | December 31, | December 31, | ||||||||||||||||||
| 2023 | 2023 | 2022 | 2023 | 2022 | |||||||||||||||||
| (in thousands) | |||||||||||||||||||||
| (Unaudited) | |||||||||||||||||||||
| Net (loss) income | $ | (443 | ) | $ | 2,145 | $ | 43,449 | $ | 15,598 | $ | 231,149 | ||||||||||
| Interest expense, net | 9,729 | 9,924 | 14,526 | 44,689 | 69,441 | ||||||||||||||||
| Income tax expense | 1,932 | 4,777 | 6,859 | 18,345 | 53,660 | ||||||||||||||||
| Depreciation, depletion and amortization | 33,658 | 30,218 | 27,274 | 114,677 | 107,122 | ||||||||||||||||
| Asset retirement obligations accretion | 7,377 | 6,414 | 6,972 | 29,018 | 26,508 | ||||||||||||||||
| Unrealized commodity derivative (gain) loss and effect of derivative premiums, net | (14,785 | ) | (3,462 | ) | (53,132 | ) | (58,846 | ) | 45,475 | ||||||||||||
| Allowance for credit losses | 28 | 6 | 43 | 37 | (76 | ) | |||||||||||||||
| Non-cash incentive compensation | 3,124 | 3,250 | 2,743 | 10,383 | 7,922 | ||||||||||||||||
| Non-recurring costs related to IT services transition | 413 | 768 | 1,844 | 3,044 | 8,237 | ||||||||||||||||
| Non-ARO P&A costs | 4,137 | 2,103 | 15,899 | 6,246 | 18,402 | ||||||||||||||||
| Other | (240 | ) | 205 | (372 | ) | 31 | (4,104 | ) | |||||||||||||
| Adjusted EBITDA | $ | 44,930 | $ | 56,348 | $ | 66,105 | $ | 183,222 | $ | 563,736 | |||||||||||
| Investment in oil and natural gas properties and equipment | (10,319 | ) | (7,960 | ) | (11,666 | ) | (41,278 | ) | (41,632 | ) | |||||||||||
| Asset retirement obligation settlements | (9,052 | ) | (13,077 | ) | (14,940 | ) | (33,970 | ) | (76,225 | ) | |||||||||||
| Interest expense, net | (9,729 | ) | (9,924 | ) | (14,526 | ) | (44,689 | ) | (69,441 | ) | |||||||||||
| Free Cash Flow | $ | 15,830 | $ | 25,387 | $ | 24,973 | $ | 63,285 | $ | 376,438 | |||||||||||
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 income (loss), a GAAP measure, to Adjusted EBITDA and Free Cash Flow, as such terms are defined by the Company.
| Three Months Ended | Year Ended | ||||||||||||||||||||
| December 31, | September 30, | December 31, | December 31, | ||||||||||||||||||
| 2023 | 2023 | 2022 | 2023 | 2022 | |||||||||||||||||
| (in thousands) | |||||||||||||||||||||
| (Unaudited) | |||||||||||||||||||||
| Net cash provided by operating activities | $ | 35,664 | $ | 30,030 | $ | 12,679 | $ | 115,326 | $ | 339,530 | |||||||||||
| Allowance for credit losses | 28 | 6 | 43 | 37 | (76 | ) | |||||||||||||||
| Amortization of debt items and other items | (1,266 | ) | (1,351 | ) | (1,437 | ) | (6,980 | ) | (7,551 | ) | |||||||||||
| Non-recurring costs related to IT services transition | 413 | 768 | 1,844 | 3,044 | 8,237 | ||||||||||||||||
| Current tax (benefit) expense(1) | (1,906 | ) | 1,710 | 1,846 | (140 | ) | 8,476 | ||||||||||||||
| Changes in derivatives receivable (payable)(1) | 1,223 | (275 | ) | 12,085 | 4,845 | 47,933 | |||||||||||||||
| Non-ARO P&A costs | 4,137 | 2,103 | 15,899 | 6,246 | 18,402 | ||||||||||||||||
| Changes in operating assets and liabilities, excluding asset retirement obligation settlements | (11,904 | ) | 151 | (5,948 | ) | (17,846 | ) | 7,223 | |||||||||||||
| Investment in oil and natural gas properties, equipment and other | (10,319 | ) | (7,960 | ) | (11,666 | ) | (41,278 | ) | (41,632 | ) | |||||||||||
| Allowance for credit losses | (240 | ) | 205 | (372 | ) | 31 | (4,104 | ) | |||||||||||||
| Free Cash Flow | $ | 15,830 | $ | 25,387 | $ | 24,973 | $ | 63,285 | $ | 376,438 | |||||||||||
| (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 expense | $ | 1,932 | $ | 4,777 | $ | 6,859 | $ | 18,345 | $ | 53,660 | |||||||||||
| Less: Deferred income taxes | 3,838 | 3,067 | 5,013 | 18,485 | 45,184 | ||||||||||||||||
| Current tax (benefit) expense | $ | (1,906 | ) | $ | 1,710 | $ | 1,846 | $ | (140 | ) | $ | 8,476 | |||||||||
| Changes in derivatives receivable (payable) | |||||||||||||||||||||
| Derivatives receivable (payable), end of period | $ | 271 | $ | (952 | ) | $ | (4,574 | ) | $ | 271 | $ | (4,574 | ) | ||||||||
| Derivatives payable, beginning of period | 952 | 677 | 16,659 | 4,574 | 6,396 | ||||||||||||||||
| Derivative premiums paid | — | — | — | — | 46,111 | ||||||||||||||||
| Change in derivatives receivable (payable) | $ | 1,223 | $ | (275 | ) | $ | 12,085 | $ | 4,845 | $ | 47,933 | ||||||||||
| W&T OFFSHORE, INC. AND SUBSIDIARIES Non-GAAP Information |
| Reconciliation of PV-10 to Standardized Measure |
The Company also discloses PV-10, which is not a financial measure defined under GAAP. The standardized measure of discounted future net cash flows is the most directly comparable GAAP financial measure for proved reserves calculated using SEC pricing. Company management believes that the non-GAAP financial measure of PV-10 is relevant and useful for evaluating the relative monetary significance of oil and natural gas properties. PV-10 is also used internally when assessing the potential return on investment related to oil and natural gas properties and in evaluating acquisition opportunities. Company management believes that the use of PV-10 is valuable because there are many unique factors that can impact an individual company when estimating the amount of future income taxes to be paid. Additionally, Company management believes that the presentation of PV-10 provides useful information to investors because it is widely used by professional analysts and sophisticated investors in evaluating oil and natural gas companies. PV-10 is not a measure of financial or operating performance under GAAP, nor is it intended to represent the current market value of the Company’s estimated oil and natural gas reserves. PV-10 should not be considered in isolation or as substitutes for the standardized measure of discounted future net cash flows as defined under GAAP. Investors should not assume that PV-10 of the Company’s proved oil and natural gas reserves represents a current market value of the Company’s estimated oil and natural gas reserves.
The following table presents a reconciliation of the standardized measure of discounted future net cash flows relating to the Company’s estimated proved oil and natural gas reserves, a GAAP measure, to PV-10, as defined by the Company.
| December 31, | ||||||||
| 2023 | 2022 | |||||||
| PV-10 | $ | 1,080.9 | $ | 3,128.6 | ||||
| Future income taxes, discounted at | (151.0 | ) | (594.1 | ) | ||||
| PV-10 after ARO | 929.9 | 2,534.5 | ||||||
| Present value of estimated ARO, discounted at | (246.7 | ) | (271.5 | ) | ||||
| Standardized measure | $ | 683.2 | $ | 2,263.0 | ||||
| CONTACT: | Al Petrie Investor Relations Coordinator apetrie@wtoffshore.com 713-297-8024 | Sameer Parasnis Executive VP and CFO sparasnis@wtoffshore.com 713-513-8654 |
FAQ
What were the total acquisitions made by W&T Offshore, Inc. in 2023?
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What was the Adjusted EBITDA reported by W&T Offshore, Inc. for 2023?
What dividend was declared by W&T Offshore, Inc. for the first quarter of 2024?
What was the total production reported by W&T Offshore, Inc. in 2023?
