W&T Offshore Announces Second Quarter 2024 Results and Declares Dividend for Third Quarter of 2024
W&T Offshore (NYSE: WTI) announced its Q2 2024 results and declared a Q3 2024 dividend of $0.01 per share.
Key highlights: daily production of 34.9 MBoe at the midpoint of guidance; lease operating expenses (LOE) at $74 million, below guidance; net cash from operations at $37.4 million; free cash flow at $18.7 million, marking the 26th consecutive positive quarter; net loss of $15.4 million, adjusted net loss at $8 million; adjusted EBITDA of $45.9 million; cash position improved by 30% to $123.4 million; net debt decreased by 9% to $268.5 million; mid-year SEC proved reserves increased by 15% to 141.9 MMBoe with a PV-10 value up 28% to $1.4 billion.
Production was impacted by a third-party shut-in at the Mobile Bay processing plant but was offset by increased production from acquired wells.
W&T Offshore (NYSE: WTI) ha annunciato i risultati del secondo trimestre 2024 e ha dichiarato un dividendo di $0,01 per azione per il terzo trimestre 2024.
Principali evidenze: produzione giornaliera di 34,9 MBoe a metà delle previsioni; spese operative per locazioni (LOE) pari a $74 milioni, al di sotto delle aspettative; flusso di cassa netto dalle operazioni di $37,4 milioni; flusso di cassa libero di $18,7 milioni, segnando il 26° trimestre consecutivo in positivo; perdita netta di $15,4 milioni, perdita netta rettificata di $8 milioni; EBITDA rettificato di $45,9 milioni; posizione di cassa migliorata del 30% a $123,4 milioni; debito netto ridotto del 9% a $268,5 milioni; le riserve provate SEC a metà anno sono aumentate del 15% a 141,9 MMBoe con un valore PV-10 cresciuto del 28% a $1,4 miliardi.
La produzione è stata influenzata dalla chiusura di un impianto di lavorazione nel Mobile Bay da parte di terzi, ma è stata compensata dall'aumento della produzione dei pozzi acquisiti.
W&T Offshore (NYSE: WTI) anunció sus resultados del segundo trimestre de 2024 y declaró un dividendo de $0.01 por acción para el tercer trimestre de 2024.
Aspectos destacados: producción diaria de 34.9 MBoe en el punto medio de la guía; gastos operativos de arrendamiento (LOE) de $74 millones, por debajo de la guía; efectivo neto de operaciones de $37.4 millones; flujo de efectivo libre de $18.7 millones, marcando el 26° trimestre consecutivo positivo; pérdida neta de $15.4 millones, pérdida neta ajustada de $8 millones; EBITDA ajustado de $45.9 millones; posición de efectivo mejorada en un 30% a $123.4 millones; deuda neta reducida en un 9% a $268.5 millones; reservas probadas de SEC a mitad de año aumentaron en un 15% a 141.9 MMBoe con un valor PV-10 que creció un 28% a $1.4 mil millones.
La producción se vio afectada por el cierre de una planta de procesamiento en Mobile Bay por parte de un tercero, pero se compensó con el aumento de la producción de los pozos adquiridos.
W&T Offshore (NYSE: WTI)는 2024년 2분기 결과를 발표하고 2024년 3분기 주당 $0.01 배당금을 선언했습니다.
주요 하이라이트: 가이드라인의 중간값에서 일일 생산량 34.9 MBoe; 임대 운영 비용(LOE)이 $7400만, 가이드라인 이하; 운영으로 인한 순 현금 $3740만; 자유 현금 흐름 $1870만으로 26분기 연속 긍정적 기록; 순손실 $1540만, 조정된 순손실 $800만; 조정된 EBITDA $4590만; 현금 위치 30% 개선되어 $1억2340만; 순부채 9% 감소하여 $2억6850만; 연초 SEC의 확정된 매장량이 141.9 MMBoe로 15% 증가, PV-10 가치는 28% 상승하여 $14억 달러에 달함.
생산은 모바일 베이 처리 공장에서 제3자의 차질로 영향을 받았지만 인수된 유정의 생산 증가로 보완되었습니다.
W&T Offshore (NYSE: WTI) a annoncé ses résultats du deuxième trimestre 2024 et a déclaré un dividende de 0,01 $ par action pour le troisième trimestre 2024.
Points clés : production quotidienne de 34,9 MBoe à mi-parcours des prévisions ; dépenses d'exploitation (LOE) à 74 millions de dollars, en dessous des prévisions ; flux de trésorerie net provenant des opérations de 37,4 millions de dollars ; flux de trésorerie libre de 18,7 millions de dollars, marquant le 26ème trimestre consécutif positif ; perte nette de 15,4 millions de dollars, perte nette ajustée de 8 millions de dollars ; EBITDA ajusté de 45,9 millions de dollars ; position de trésorerie améliorée de 30 % à 123,4 millions de dollars ; dette nette réduite de 9 % à 268,5 millions de dollars ; les réserves prouvées par la SEC à mi-année ont augmenté de 15 % à 141,9 MMBoe avec une valeur PV-10 en hausse de 28 % à 1,4 milliard de dollars.
La production a été impactée par un arrêt de tiers dans l'usine de traitement de Mobile Bay, mais a été compensée par une augmentation de la production des puits acquis.
W&T Offshore (NYSE: WTI) gab die Ergebnisse des zweiten Quartals 2024 bekannt und erklärte eine Dividende von 0,01 $ pro Aktie für das dritte Quartal 2024.
Wichtige Höhepunkte: tägliche Produktion von 34,9 MBoe im Mittel der Prognose; Betriebskosten für Pachtverträge (LOE) in Höhe von 74 Millionen US-Dollar, unterhalb der Prognose; Nettocashflow aus dem operativen Geschäft von 37,4 Millionen US-Dollar; freier Cashflow von 18,7 Millionen US-Dollar, was das 26. positive Quartal in Folge markiert; Nettoverlust von 15,4 Millionen US-Dollar, bereinigter Nettoverlust von 8 Millionen US-Dollar; bereinigtes EBITDA von 45,9 Millionen US-Dollar; Bargeldposition um 30% auf 123,4 Millionen US-Dollar verbessert; Nettoverschuldung um 9% auf 268,5 Millionen US-Dollar gesenkt; die nach SEC bewerteten Reserven zur Jahresmitte stiegen um 15% auf 141,9 MMBoe, mit einem PV-10-Wert, der um 28% auf 1,4 Milliarden US-Dollar zunahm.
Die Produktion wurde durch den Stillstand eines Drittanbieters im Verarbeitungswerk in Mobile Bay beeinträchtigt, wurde jedoch durch eine erhöhte Produktion aus akquirierten Bohrlöchern ausgeglichen.
- Free Cash Flow of $18.7 million for the 26th consecutive positive quarter.
- Adjusted EBITDA of $45.9 million.
- Cash and cash equivalents increased by 30% to $123.4 million.
- Net debt decreased by 9% to $268.5 million.
- Mid-year SEC proved reserves increased by 15% to 141.9 MMBoe.
- PV-10 value of reserves increased by 28% to $1.4 billion.
- Net loss of $15.4 million.
- Adjusted net loss of $8 million.
- LOE increased by 4% QoQ to $74 million.
- Production impacted by third-party shut-in at Mobile Bay processing plant.
Insights
W&T Offshore's Q2 2024 results show a mixed financial performance. While the company reported a net loss of
The increase in cash and cash equivalents by
However, investors should note the decline in production compared to Q2 2023 and the increase in lease operating expenses. The company's ability to maintain production levels and control costs will be important for future performance.
W&T Offshore's mid-year reserve report shows promising results, with proved reserves increasing to 141.9 MMBoe, up
The company's focus on the Gulf of Mexico and recent acquisitions appear to be paying off, with four out of six newly acquired fields now online. However, the production challenges at Mobile Bay due to third-party processing plant issues highlight the operational risks inherent in the offshore environment.
The company's ability to negotiate new agreements and find alternative processing solutions demonstrates adaptability, which is important in the dynamic offshore oil and gas sector. Investors should monitor the progress of bringing the remaining two shut-in fields online, as this could significantly impact future production and cash flows.
HOUSTON, Aug. 06, 2024 (GLOBE NEWSWIRE) -- W&T Offshore, Inc. (NYSE: WTI) (“W&T” or the “Company”) today reported operational and financial results for the second quarter of 2024 and declared a third quarter 2024 dividend of
This press release includes non-GAAP financial measures, including Adjusted Net Loss, Adjusted EBITDA, Free Cash Flow, Net Debt and PV-10, which are described and reconciled to the most comparable GAAP financial measures below in the accompanying tables under “Non-GAAP Information.”
Key highlights for the second quarter of 2024 and through the date of this press release include:
- Produced 34.9 thousand barrels of oil equivalent per day (“MBoe/d”) (
55% liquids) at the midpoint of the Company’s second quarter guidance; - Incurred lease operating expenses (“LOE”) of
$74.0 million , which was below the bottom end of the Company’s second quarter guidance range; - Generated net cash from operating activities of
$37.4 million and Free Cash Flow of$18.7 million in the second quarter of 2024, marking the 26th consecutive quarter of positive Free Cash Flow; - Reported net loss of
$15.4 million , or$(0.10) per diluted share;- Adjusted Net Loss totaled
$8.0 million , or$(0.05) per share, which excludes non-recurring costs, the net unrealized loss on outstanding derivative contracts, non-ARO plugging and abandonment (“P&A”) costs and related tax effect;
- Adjusted Net Loss totaled
- Posted Adjusted EBITDA of
$45.9 million ; - Reported cash and cash equivalents of
$123.4 million , an increase of30% , and Net Debt of$268.5 million , a decrease of9% , at June 30, 2024 compared to the first quarter of 2024; - Continued to maintain a low leverage profile with Net Debt to trailing twelve months (“TTM”) Adjusted EBITDA of 1.4x;
- Paid third consecutive quarterly dividend of
$0.01 per common share in May 2024;- Declared third quarter of 2024 dividend of
$0.01 per share, which will be payable on August 27, 2024 to stockholders of record on August 20, 2024; and
- Declared third quarter of 2024 dividend of
- Reported mid-year SEC proved reserves of 141.9 million barrels of oil equivalent (“MMBoe”), using SEC prices and based on a reserve report prepared by Netherland, Sewell and Associates, Inc. (“NSAI”), and a present value of those SEC proved reserves discounted at
10% (“PV-10”) of$1.4 billion , an increase of15% and28% , respectively, compared to year-end 2023.
Tracy W. Krohn, W&T’s Board Chair and Chief Executive Officer, commented, “We remain committed to executing our strategic vision focused on free cash flow generation, maintaining solid production and maximizing margins while increasing proved reserves and PV-10. This commitment enabled W&T to deliver another quarter of solid results where production was at the midpoint of our guidance range, LOE was below the bottom end of our guidance range and more importantly, we increased our cash on hand by
“Our 2024 mid-year reserve report generated by NSAI shows a meaningful increase in reserves and PV-10 value, which demonstrates the resiliency and strength of our asset base. Our improved balance sheet enables us to continue to grow both organically and through targeted, complementary acquisitions in the Gulf of Mexico that allow us to leverage our scale and expertise in the basin. We are well positioned to capture and enhance value, while returning capital to our shareholders through the quarterly dividend program. Our proven and successful strategy and operational excellence should help us to continue to produce strong results both operationally and financially for the remainder of 2024 and into 2025.”
Production, Prices and Revenue: Production for the second quarter of 2024 was 34.9 MBoe/d, at the midpoint of the Company’s second quarter guidance and virtually flat compared with 35.1 MBoe/d for the first quarter of 2024 and 37.0 MBoe/d for the corresponding period in 2023. Second quarter 2024 production was comprised of 15.2 thousand barrels per day (“MBbl/d”) of oil (
- Successfully negotiated a new beneficial agreement with the MO916 gas processor and returned the field to production on May 27th at rates consistent with expectations;
- With the return of MO916 to production, four of the six fields acquired are now on production; and
- For the two remaining shut-in fields, engineering design studies are in progress as W&T continues to work parallel paths on each to expedite their return to production, either through existing third-party sales routes or alternative Company-owned sales routes.
W&T’s average realized price per Boe before realized derivative settlements was
Revenues for the second quarter of 2024 were
Lease Operating Expense: LOE, which includes base lease operating expenses, insurance premiums, workovers and facilities maintenance expenses, was
Gathering, Transportation Costs and Production Taxes: Gathering, transportation costs and production taxes totaled
Depreciation, Depletion and Amortization (“DD&A”): DD&A was
Asset Retirement Obligations Accretion: Asset retirement obligations accretion was
General & Administrative Expenses (“G&A”): G&A was
Derivative Loss (Gain), net: In the second quarter of 2024, W&T recorded a net loss of
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 second quarter of 2024 was
Other Expense: 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 non-ARO plugging and abandonment costs. During the second quarter of 2024, the Company reassessed its existing obligations and recorded an additional
Income Tax (Benefit) Expense: W&T recognized an income tax benefit of
Balance Sheet and Liquidity: As of June 30, 2024, W&T had available liquidity of
Capital Expenditures: Capital expenditures on an accrual basis (excluding acquisitions) in the second quarter of 2024 were
OPERATIONS UPDATE
Well Recompletions and Workovers
During the second quarter of 2024, the Company performed three workovers and two 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.
Cash Dividend Policy
The Company paid its second quarter 2024 dividend of
The Board of Directors declared a third quarter 2024 dividend of
Mid-Year 2024 Proved Reserves
As calculated by NSAI, W&T’s independent reserve engineering consultants, proved reserves using SEC pricing methodology totaled 141.9 MMBoe at June 30, 2024, compared with 123.0 MMBoe at year-end 2023. The increase in proved reserves was primarily driven by acquisition additions of 21.8 MMBoe and positive revisions of 3.5 MMBoe, partially offset by 6.3 MMBoe of production in the first half of 2024. The mid-year proved reserves, which were
The pre-tax PV-10 of the mid-year 2024 proved reserves using SEC pricing was
Third Quarter and Full Year 2024 Production and Expense Guidance
The guidance for the third 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. Third quarter and full year 2024 guidance reflects the impact of third-party pipeline issues due to the Cox bankruptcy.
W&T plans to spend more on LOE in the third quarter of 2024 to undertake some of the projects deferred earlier in the year. However, full year estimated LOE was reduced to a range of
| Production | Third Quarter 2024 | Full Year 2024 | |
| Oil (MBbl) | 1,175-1,325 | 5,000-5,500 | |
| NGLs (MBbl) | 250-300 | 1,150-1,350 | |
| Natural gas (MMcf) | 8,500-9,500 | 34,500-38,500 | |
| Total equivalents (MBoe) | 2,842-3,208 | 11,900-13,267 | |
| Average daily equivalents (MBoe/d) | 30.9-34.9 | 32.5-36.2 | |
| Expenses | Third Quarter 2024 | Full Year 2024 | |
| Lease operating expense ($MM) | 77.0-85.0 | 280.0-315.0 | |
| Gathering, transportation & production taxes ($MM) | 7.5-8.5 | 31.0-34.0 | |
| General & administrative – cash ($MM) | 16.0-17.5 | 66.0-74.0 | |
| General & administrative – non-cash ($MM) | 3.7-4.1 | 11.5-13.5 | |
| DD&A ($ per Boe) | 13.00-14.00 | ||
W&T expects substantially all taxes in 2024 to be deferred.
Conference Call Information: W&T will hold a conference call to discuss its financial and operational results on Wednesday, August 7, 2024 at 9:00 a.m. Central Time (10:00 a.m. 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 June 30, 2024, the Company had working interests in 63 fields in federal and state waters (which include 55 fields in federal waters and eight in state waters). The Company has under lease approximately 678,100 gross acres (520.400 net acres) spanning across the outer continental shelf off the coasts of Louisiana, Texas, Mississippi and Alabama, with approximately 519,000 gross acres on the conventional shelf, approximately 153,500 gross acres in the deepwater and 5,600 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+”) and change in OPEC+’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. | |||||||||||||||||||
| Condensed Consolidated Statements of Operations | |||||||||||||||||||
| (In thousands, except per share data) | |||||||||||||||||||
| (Unaudited) | |||||||||||||||||||
| Three Months Ended | Six Months Ended | ||||||||||||||||||
| June 30, | March 31, | June 30, | June 30, | ||||||||||||||||
| 2024 | 2024 | 2023 | 2024 | 2023 | |||||||||||||||
| Revenues: | |||||||||||||||||||
| Oil | $ | 110,965 | $ | 107,015 | $ | 89,982 | $ | 217,980 | $ | 186,982 | |||||||||
| NGLs | 8,160 | 7,469 | 10,385 | 15,629 | 18,180 | ||||||||||||||
| Natural gas | 21,910 | 21,616 | 23,438 | 43,526 | 48,242 | ||||||||||||||
| Other | 1,722 | 4,687 | 2,376 | 6,409 | 4,502 | ||||||||||||||
| Total revenues | 142,757 | 140,787 | 126,181 | 283,544 | 257,906 | ||||||||||||||
| Operating expenses: | |||||||||||||||||||
| Lease operating expenses | 73,987 | 70,830 | 66,021 | 144,817 | 131,207 | ||||||||||||||
| Gathering, transportation and production taxes | 8,578 | 7,540 | 6,802 | 16,118 | 12,938 | ||||||||||||||
| Depreciation, depletion, and amortization | 36,674 | 33,937 | 28,177 | 70,611 | 50,801 | ||||||||||||||
| Asset retirement obligations accretion | 8,400 | 7,969 | 7,717 | 16,369 | 15,227 | ||||||||||||||
| General and administrative expenses | 21,354 | 20,515 | 17,393 | 41,869 | 37,312 | ||||||||||||||
| Total operating expenses | 148,993 | 140,791 | 126,110 | 289,784 | 247,485 | ||||||||||||||
| Operating (loss) income | (6,236 | ) | (4 | ) | 71 | (6,240 | ) | 10,421 | |||||||||||
| Interest expense, net | 10,164 | 10,072 | 10,323 | 20,236 | 25,036 | ||||||||||||||
| Derivative loss (gain), net | 2,374 | (4,877 | ) | (829 | ) | (2,503 | ) | (40,069 | ) | ||||||||||
| Other expense (income), net | 1,250 | 5,230 | (311 | ) | 6,480 | (78 | ) | ||||||||||||
| (Loss) income before income taxes | (20,024 | ) | (10,429 | ) | (9,112 | ) | (30,453 | ) | 25,532 | ||||||||||
| Income tax (benefit) expense | (4,636 | ) | 1,045 | 2,997 | (3,591 | ) | 11,636 | ||||||||||||
| Net (loss) income | $ | (15,388 | ) | $ | (11,474 | ) | $ | (12,109 | ) | $ | (26,862 | ) | $ | 13,896 | |||||
| Net (loss) income per share: | |||||||||||||||||||
| Basic | $ | (0.10 | ) | $ | (0.08 | ) | $ | (0.08 | ) | $ | (0.18 | ) | $ | 0.09 | |||||
| Diluted | (0.10 | ) | (0.08 | ) | (0.08 | ) | (0.18 | ) | 0.09 | ||||||||||
| Weighted average common shares outstanding | |||||||||||||||||||
| Basic | 146,943 | 146,857 | 146,452 | 146,900 | 146,435 | ||||||||||||||
| Diluted | 146,943 | 146,857 | 146,452 | 146,900 | 149,045 | ||||||||||||||
| W&T OFFSHORE, INC. | |||||||||||||||||||
| Condensed Operating Data | |||||||||||||||||||
| (Unaudited) | |||||||||||||||||||
| Three Months Ended | Six MonthsEnded | ||||||||||||||||||
| June 30, | March 31, | June 30, | June 30, | ||||||||||||||||
| 2024 | 2024 | 2023 | 2024 | 2023 | |||||||||||||||
| Net sales volumes: | |||||||||||||||||||
| Oil (MBbls) | 1,382 | 1,400 | 1,254 | 2,782 | 2,604 | ||||||||||||||
| NGLs (MBbls) | 334 | 343 | 443 | 677 | 738 | ||||||||||||||
| Natural gas (MMcf) | 8,769 | 8,733 | 10,023 | 17,502 | 17,699 | ||||||||||||||
| Total oil and natural gas (MBoe)(1) | 3,177 | 3,199 | 3,368 | 6,376 | 6,292 | ||||||||||||||
| Average daily equivalent sales (MBoe/d) | 34.9 | 35.1 | 37.0 | 35.0 | 34.8 | ||||||||||||||
| Average realized sales prices (before the impact of derivative settlements): | |||||||||||||||||||
| Oil ($/Bbl) | $ | 80.29 | $ | 76.44 | $ | 71.76 | $ | 78.35 | $ | 71.81 | |||||||||
| NGLs ($/Bbl) | 24.43 | 21.78 | 23.44 | 23.09 | 24.63 | ||||||||||||||
| Natural gas ($/Mcf) | 2.50 | 2.48 | 2.34 | 2.49 | 2.73 | ||||||||||||||
| Barrel of oil equivalent ($/Boe) | 44.40 | 42.55 | 36.76 | 43.47 | 40.27 | ||||||||||||||
| Average operating expenses per Boe ($/Boe): | |||||||||||||||||||
| Lease operating expenses | $ | 23.29 | $ | 22.14 | $ | 19.60 | $ | 22.71 | $ | 20.85 | |||||||||
| Gathering, transportation and production taxes | 2.70 | 2.36 | 2.02 | 2.53 | 2.06 | ||||||||||||||
| Depreciation, depletion, and amortization | 11.55 | 10.61 | 8.37 | 11.07 | 8.07 | ||||||||||||||
| Asset retirement obligations accretion | 2.64 | 2.49 | 2.29 | 2.57 | 2.42 | ||||||||||||||
| General and administrative expenses | 6.72 | 6.41 | 5.16 | 6.57 | 5.93 | ||||||||||||||
(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) | |||||||
| June 30, | December 31, | ||||||
| 2024 | 2023 | ||||||
| Assets | |||||||
| Current assets: | |||||||
| Cash and cash equivalents | $ | 123,375 | $ | 173,338 | |||
| Restricted cash | 4,417 | 4,417 | |||||
| Receivables: | |||||||
| Oil and natural gas sales | 71,547 | 52,080 | |||||
| Joint interest, net | 20,478 | 15,480 | |||||
| Other | 2,223 | 2,218 | |||||
| Prepaid expenses and other assets | 25,890 | 17,447 | |||||
| Total current assets | 247,930 | 264,980 | |||||
| Oil and natural gas properties and other, net | 802,401 | 749,056 | |||||
| Restricted deposits for asset retirement obligations | 22,479 | 22,272 | |||||
| Deferred income taxes | 42,365 | 38,774 | |||||
| Other assets | 33,396 | 38,923 | |||||
| Total assets | $ | 1,148,571 | $ | 1,114,005 | |||
| Liabilities and Shareholders’ Equity | |||||||
| Current liabilities: | |||||||
| Accounts payable | $ | 89,129 | $ | 78,857 | |||
| Accrued liabilities | 29,004 | 31,978 | |||||
| Undistributed oil and natural gas proceeds | 63,150 | 42,134 | |||||
| Advances from joint interest partners | 2,565 | 2,962 | |||||
| Current portion of asset retirement obligation | 35,627 | 31,553 | |||||
| Current portion of long-term debt, net | 14,925 | 29,368 | |||||
| Total current liabilities | 234,400 | 216,852 | |||||
| Asset retirement obligations | 498,848 | 467,262 | |||||
| Long-term debt, net | 376,979 | 361,236 | |||||
| Other liabilities | 16,668 | 19,420 | |||||
| Commitments and contingencies | 16,671 | 18,043 | |||||
| Shareholders’ equity: | |||||||
| Preferred stock | — | — | |||||
| Common stock | 2 | 1 | |||||
| Additional paid-in capital | 589,678 | 586,014 | |||||
| Retained deficit | (560,508 | ) | (530,656 | ) | |||
| Treasury stock | (24,167 | ) | (24,167 | ) | |||
| Total shareholders’ equity | 5,005 | 31,192 | |||||
| Total liabilities and shareholders’ equity | $ | 1,148,571 | $ | 1,114,005 | |||
| W&T OFFSHORE, INC. | |||||||||||||||||||
| Condensed Consolidated Statements of Cash Flows | |||||||||||||||||||
| (In thousands) | |||||||||||||||||||
| (Unaudited) | |||||||||||||||||||
| Three Months Ended | Six Month Ended | ||||||||||||||||||
| June 30, | March 31, | June 30, | June 30, | ||||||||||||||||
| 2024 | 2024 | 2023 | 2024 | 2023 | |||||||||||||||
| Operating activities: | |||||||||||||||||||
| Net (loss) income | $ | (15,388 | ) | $ | (11,474 | ) | $ | (12,109 | ) | $ | (26,862 | ) | $ | 13,896 | |||||
| Adjustments to reconcile net (loss) income to net cash provided by operating activities: | |||||||||||||||||||
| Depreciation, depletion, amortization and accretion | 45,074 | 41,906 | 35,894 | 86,980 | 66,028 | ||||||||||||||
| Share-based compensation | 1,386 | 3,032 | 2,087 | 4,418 | 4,009 | ||||||||||||||
| Amortization and write off of debt issuance costs | 1,044 | 1,292 | 1,114 | 2,336 | 4,363 | ||||||||||||||
| Derivative loss (gain), net | 2,374 | (4,877 | ) | (829 | ) | (2,503 | ) | (40,069 | ) | ||||||||||
| Derivative cash settlements, net | 2,358 | 2,599 | 901 | 4,957 | (4,427 | ) | |||||||||||||
| Deferred income (benefit) taxes | (4,324 | ) | 733 | 7,184 | (3,591 | ) | 11,580 | ||||||||||||
| Changes in operating assets and liabilities: | |||||||||||||||||||
| Accounts receivable | (7,108 | ) | (17,362 | ) | 7,424 | (24,470 | ) | 24,929 | |||||||||||
| Prepaid expenses and other current assets | (6,177 | ) | 433 | (4,497 | ) | (5,744 | ) | 26,992 | |||||||||||
| Accounts payable, accrued liabilities and other | 26,416 | (852 | ) | (7,773 | ) | 25,564 | (45,828 | ) | |||||||||||
| Asset retirement obligation settlements | (8,209 | ) | (3,788 | ) | (3,199 | ) | (11,997 | ) | (11,841 | ) | |||||||||
| Net cash provided by operating activities | 37,446 | 11,642 | 26,197 | 49,088 | 49,632 | ||||||||||||||
| Investing activities: | |||||||||||||||||||
| Investment in oil and natural gas properties and equipment | (6,576 | ) | (7,080 | ) | (12,179 | ) | (13,656 | ) | (25,337 | ) | |||||||||
| Acquisition of property interests | (120 | ) | (80,515 | ) | — | (80,635 | ) | — | |||||||||||
| Purchase of corporate aircraft | — | — | (8,983 | ) | — | (8,983 | ) | ||||||||||||
| Purchases of furniture, fixtures and other | (73 | ) | (24 | ) | (62 | ) | (97 | ) | (218 | ) | |||||||||
| Net cash used in investing activities | (6,769 | ) | (87,619 | ) | (21,224 | ) | (94,388 | ) | (34,538 | ) | |||||||||
| Financing activities: | |||||||||||||||||||
| Proceeds from issuance of long-term debt | — | — | — | 275,000 | |||||||||||||||
| Repayments of long-term debt | (275 | ) | (275 | ) | (9,812 | ) | (550 | ) | (571,824 | ) | |||||||||
| Debt issuance costs | (93 | ) | (312 | ) | (898 | ) | (405 | ) | (7,252 | ) | |||||||||
| Payment of dividends | (1,485 | ) | (1,469 | ) | — | (2,954 | ) | — | |||||||||||
| Other | (271 | ) | (483 | ) | (25 | ) | (754 | ) | (748 | ) | |||||||||
| Net cash used in financing activities | (2,124 | ) | (2,539 | ) | (10,735 | ) | (4,663 | ) | (304,824 | ) | |||||||||
| Change in cash, cash equivalents and restricted cash | 28,553 | (78,516 | ) | (5,762 | ) | (49,963 | ) | (289,730 | ) | ||||||||||
| Cash, cash equivalents and restricted cash, beginning of period | 99,239 | 177,755 | 181,806 | 177,755 | 465,774 | ||||||||||||||
| Cash, cash equivalents and restricted cash, end of period | $ | 127,792 | $ | 99,239 | $ | 176,044 | $ | 127,792 | $ | 176,044 | |||||||||
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,” “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
Adjusted Net Loss 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, net, allowance for credit losses, write-off of debt issuance costs, non-recurring legal and IT-related costs, non-ARO plugging and abandonment costs, and other which are then tax effected using the Federal Statutory Rate.
| Three Months Ended | Six Months Ended | ||||||||||||||||||
| June 30, | March 31, | June 30, | June 30, | ||||||||||||||||
| 2024 | 2024 | 2023 | 2024 | 2023 | |||||||||||||||
| (in thousands) | |||||||||||||||||||
| (Unaudited) | |||||||||||||||||||
| Net (loss) income | $ | (15,388 | ) | $ | (11,474 | ) | $ | (12,109 | ) | $ | (26,862 | ) | $ | 13,896 | |||||
| Unrealized commodity derivative loss (gain), net | 2,738 | (1,122 | ) | (1,129 | ) | 1,616 | (40,599 | ) | |||||||||||
| Allowance for credit losses | 346 | 84 | 3 | 430 | 3 | ||||||||||||||
| Write-off debt issuance costs | — | — | — | — | 2,330 | ||||||||||||||
| Non-recurring legal and IT-related costs | 4,202 | 758 | 1,078 | 4,960 | 1,863 | ||||||||||||||
| Non-ARO P&A costs | 1,709 | 5,352 | — | 7,061 | 6 | ||||||||||||||
| Other | 304 | (214 | ) | (294 | ) | 90 | 84 | ||||||||||||
| Tax effect of selected items(1) | (1,953 | ) | (1,020 | ) | 72 | (2,973 | ) | 7,626 | |||||||||||
| Adjusted net loss | $ | (8,042 | ) | $ | (7,636 | ) | $ | (12,379 | ) | $ | (15,678 | ) | $ | (14,791 | ) | ||||
| Adjusted net loss per common share: | |||||||||||||||||||
| Basic | $ | (0.05 | ) | $ | (0.05 | ) | $ | (0.08 | ) | $ | (0.11 | ) | $ | (0.10 | ) | ||||
| Diluted | $ | (0.05 | ) | $ | (0.05 | ) | $ | (0.08 | ) | $ | (0.11 | ) | $ | (0.10 | ) | ||||
| Weighted average shares outstanding: | |||||||||||||||||||
| Basic | 146,943 | 146,857 | 146,452 | 146,900 | 146,435 | ||||||||||||||
| Diluted | 146,943 | 146,857 | 146,452 | 146,900 | 146,435 | ||||||||||||||
(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 non-GAAP financial measures of Adjusted EBITDA and Free Cash Flow. The Company defines Adjusted EBITDA as net (loss) income plus net interest expense, income tax (benefit) expense, depreciation, depletion and amortization, ARO accretion, excluding the unrealized commodity derivative loss (gain), allowance for credit losses, non-cash incentive compensation, non-recurring legal and IT-related 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 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.
The following table presents 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 | Six Months Ended | ||||||||||||||||||
| June 30, | March 31, | June 30, | June 30, | ||||||||||||||||
| 2024 | 2024 | 2023 | 2024 | 2023 | |||||||||||||||
| (in thousands) | |||||||||||||||||||
| (Unaudited) | |||||||||||||||||||
| Net (loss) income | $ | (15,388 | ) | $ | (11,474 | ) | $ | (12,109 | ) | $ | (26,862 | ) | $ | 13,896 | |||||
| Interest expense, net | 10,164 | 10,072 | 10,323 | 20,236 | 25,036 | ||||||||||||||
| Income tax (benefit) expense | (4,636 | ) | 1,045 | 2,997 | (3,591 | ) | 11,636 | ||||||||||||
| Depreciation, depletion and amortization | 36,674 | 33,937 | 28,177 | 70,611 | 50,801 | ||||||||||||||
| Asset retirement obligations accretion | 8,400 | 7,969 | 7,717 | 16,369 | 15,227 | ||||||||||||||
| Unrealized commodity derivative loss (gain), net | 2,738 | (1,122 | ) | (1,129 | ) | 1,616 | (40,599 | ) | |||||||||||
| Allowance for credit losses | 346 | 84 | 3 | 430 | 3 | ||||||||||||||
| Non-cash incentive compensation | 1,386 | 3,032 | 2,087 | 4,418 | 4,009 | ||||||||||||||
| Non-recurring legal and IT-related costs | 4,202 | 758 | 1,078 | 4,960 | 1,863 | ||||||||||||||
| Non-ARO P&A costs | 1,709 | 5,352 | — | 7,061 | 6 | ||||||||||||||
| Other | 304 | (214 | ) | (312 | ) | 90 | 66 | ||||||||||||
| Adjusted EBITDA | $ | 45,899 | $ | 49,439 | $ | 38,832 | $ | 95,338 | $ | 81,944 | |||||||||
| Capital expenditures, accrual basis(1) | $ | (8,781 | ) | $ | (3,156 | ) | $ | (15,632 | ) | $ | (11,937 | ) | $ | (22,999 | ) | ||||
| Asset retirement obligation settlements | (8,209 | ) | (3,788 | ) | (3,199 | ) | (11,997 | ) | (11,841 | ) | |||||||||
| Interest expense, net | (10,164 | ) | (10,072 | ) | (10,323 | ) | (20,236 | ) | (25,036 | ) | |||||||||
| Free Cash Flow | $ | 18,745 | $ | 32,423 | $ | 9,678 | $ | 51,168 | $ | 22,068 | |||||||||
(1) A reconciliation of the adjustment used to calculate Free Cash Flow to the Condensed Consolidated Financial Statements is included below:
| Capital expenditures, accrual basis reconciliation | ||||||||||||||||||||||||||||||||||||||||
| Investment in oil and natural gas properties and equipment | $ | (6,576 | ) | $ | (7,080 | ) | $ | (12,179 | ) | $ | (13,656 | ) | $ | (25,337 | ) | |||||||||||||||||||||||||
| Less: changes in operating assets and liabilities associated with investing activities | 2,205 | (3,924 | ) | 3,453 | (1,719 | ) | (2,338 | ) | ||||||||||||||||||||||||||||||||
| Capital expenditures, accrual basis | $ | (8,781 | ) | $ | (3,156 | ) | $ | (15,632 | ) | $ | (11,937 | ) | $ | (22,999 | ) | |||||||||||||||||||||||||
The following table presents a reconciliation of cash flow from operating activities, a GAAP measure, to Free Cash Flow, as defined by the Company:
| Three Months Ended | Six Months | ||||||||||||||||||
| June 30, | March 31, | June 30, | June 30, | ||||||||||||||||
| 2024 | 2024 | 2023 | 2024 | 2023 | |||||||||||||||
| (in thousands) | |||||||||||||||||||
| (Unaudited) | |||||||||||||||||||
| Net cash provided by operating activities | $ | 37,446 | $ | 11,642 | $ | 26,197 | $ | 49,088 | $ | 49,632 | |||||||||
| Allowance for credit losses | 346 | 84 | 3 | 430 | 3 | ||||||||||||||
| Amortization of debt items and other items | (1,044 | ) | (1,292 | ) | (1,114 | ) | (2,336 | ) | (4,363 | ) | |||||||||
| Non-recurring legal and IT-related costs | 4,202 | 758 | 1,078 | 4,960 | 1,863 | ||||||||||||||
| Current tax (benefit) expense(1) | (312 | ) | 312 | (4,187 | ) | — | 56 | ||||||||||||
| Change in derivatives (payable) receivable(1) | (1,994 | ) | 1,156 | (1,201 | ) | (838 | ) | 3,897 | |||||||||||
| Non-ARO P&A costs | 1,709 | 5,352 | — | 7,061 | 6 | ||||||||||||||
| Changes in operating assets and liabilities, excluding asset retirement obligation settlements | (13,131 | ) | 17,781 | 4,846 | 4,650 | (6,093 | ) | ||||||||||||
| Capital expenditures, accrual basis | (8,781 | ) | (3,156 | ) | (15,632 | ) | (11,937 | ) | (22,999 | ) | |||||||||
| Other | 304 | (214 | ) | (312 | ) | 90 | 66 | ||||||||||||
| Free Cash Flow | $ | 18,745 | $ | 32,423 | $ | 9,678 | $ | 51,168 | $ | 22,068 | |||||||||
(1) A reconciliation of the adjustments used to calculate Free Cash Flow to the Condensed Consolidated Financial Statements is included below:
| Current tax (benefit) expense: | |||||||||||||||||||
| Income tax (benefit) expense | $ | (4,636 | ) | $ | 1,045 | $ | 2,997 | $ | (3,591 | ) | $ | 11,636 | |||||||
| Less: Deferred income (benefit) taxes | (4,324 | ) | 733 | 7,184 | (3,591 | ) | 11,580 | ||||||||||||
| Current tax (benefit) expense | $ | (312 | ) | $ | 312 | $ | (4,187 | ) | $ | — | $ | 56 | |||||||
| Changes in derivatives receivable (payable) | |||||||||||||||||||
| Derivatives receivable (payable), end of period | $ | (567 | ) | $ | 1,427 | $ | (677 | ) | $ | (567 | ) | $ | (677 | ) | |||||
| Derivatives (receivable) payable, beginning of period | (1,427 | ) | (271 | ) | (524 | ) | (271 | ) | 4,574 | ||||||||||
| Change in derivatives (payable) receivable | $ | (1,994 | ) | $ | 1,156 | $ | (1,201 | ) | $ | (838 | ) | $ | 3,897 | ||||||
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. With respect to PV-10 calculated as of an interim date (i.e., other than year-end), it is not practical for the Company to reconcile the PV-10 of its SEC pricing proved reserves as of June 30, 2024 because GAAP does not provide for disclosure of standardized measure on an interim basis.
| CONTACT: | Al Petrie | Sameer Parasnis |
| Investor Relations Coordinator | Executive VP and CFO | |
| investorrelations@wtoffshore.com | sparasnis@wtoffshore.com | |
| 713-297-8024 | 713-513-8654 |
FAQ
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