W&T Offshore, Inc. (NYSE: WTI) (“W&T” or the “Company”)
today reported operational and financial results for the second
quarter 2022. This press release includes non-GAAP financial
measures, including Adjusted Net Income, Adjusted EBITDA, Free Cash
Flow, and Net Debt, which are described and reconciled to the most
comparable GAAP measures below in the accompanying tables under
“Non-GAAP Information.”
Key highlights for the second quarter 2022 and
through the date of this press release included:
- Increased production by 12%
quarter-over-quarter to 42.4 thousand barrels of oil equivalent per
day (“MBoe/d”) (48% liquids), or 3.9 million barrels of oil
equivalent (“MMBoe”), exceeding the high end of previously
disclosed quarterly guidance;
- Raised full year 2022 production
guidance mid-point by 2%;
- Generated net
income of $123.4 million or $0.85 per diluted share in the second
quarter of 2022, which is the third best quarterly net income in
the Company’s history as a public company;
- Adjusted Net Income
totaled $190.5 million, or $1.32 per diluted share in the second
quarter of 2022;
- Monetized a portion
of W&T’s natural gas hedge position resulting in a net gain
from the transaction of $138.0 million and net proceeds of $105.3
million;
- Restructured strike
prices on outstanding purchased natural gas calls covering the
second half of 2022 through the first quarter of 2025 to monetize
some of the value of the call options while maintaining the ability
to participate in future increases in natural gas prices;
- Reported Adjusted
EBITDA of $294.0 million for the second quarter of 2022;
- Year-to-date 2022
Adjusted EBITDA of $383.7 million is equal to full year 2021 and
2020 combined;
- Expanded Free Cash
Flow to $233.5 million for the second quarter 2022, which was more
Free Cash Flow than full year 2021 and 2020 combined;
- W&T has
generated positive Free Cash Flow for 18 consecutive quarters;
- Increased cash and
cash equivalents to $377.7 million, up 81% from $209.1 million at
June 30, 2021;
- Decreased Net Debt
by 39% year-over-year to $331.4 million as of June 30, 2022;
- Realized
significant improvement in the Company’s leverage profile with Net
Debt to trailing twelve months (“TTM”) Adjusted EBITDA of 0.7 times
compared to a ratio of 3.3 times one year ago;
- Acquired the
remaining 20% working interests in oil and gas producing properties
at Ship Shoal 230, South Marsh Island 27/Vermilion 191, and South
Marsh Island 73 fields for $17.5 million; and
- Reported mid-year
SEC proved reserves, based on a reserve report prepared by
Netherland, Sewell and Associates, Inc. (“NSAI”), grew 7% to 168.3
MMBoe, and pre-tax PV-10 value (SEC pricing) increased 62% to $2.6
billion, compared to year-end 2021;
- Positive
performance revisions, price revisions and purchase of minerals in
place totaled 17.9 MMBoe which replaced approximately 2.5 times
year-to-date 2022 production of 7.3 MMBoe.
Tracy W. Krohn, Chairman and Chief Executive
Officer, stated, “Our strategy has always been focused on free cash
flow generation, and the combination of solid operational results
and opportunistically monetizing a portion of our hedge position
allowed us to deliver one of our best quarterly financial results
in W&T’s long history. Our second quarter production was up 12%
over the first quarter and well above the high end of our guidance
range. Adjusted EBITDA was $294.0 million for the second quarter
and we have now generated $383.7 million during the first half of
2022. To put this in perspective, we generated $220.3 million and
$163.4 million in Adjusted EBITDA in 2021 and 2020, respectively.
We generated Free Cash Flow in the second quarter of $233.5
million, which marked our 18th consecutive quarter of Free Cash
Flow generation. Additionally, we decreased net debt by 39% to
$331.4 million, which drove our Net Debt to TTM Adjusted EBITDA
ratio down to 0.7 times which is below our stated goal of below 1.0
times by year-end 2022. During the second quarter of 2022, we took
advantage of the sharp increase in natural gas forward prices and
monetized the value of a portion of our natural gas hedge position
resulting in a net gain from the transaction of $138.0 million and
net proceeds of $105.3 million.”
“We are very pleased with our mid-year reserve
report that showed strong reserve growth. Positive performance and
pricing revisions, combined with the acquisitions made in the first
half of the year allowed us to replace about two and a half times
our production. W&T has an outstanding asset base that
generates meaningful cash flow and has significant long-term value,
and this is very evident when you look at the mid-year 2022 PV-10
of our proved reserve base at SEC pricing. At $2.6 billion, this
represents an increase of 62% compared with $1.6 billion at
year-end 2021, which clearly reflects the significant upside value
we have at W&T.”
“The Company is well positioned with a solid
balance sheet and stable production that will allow us to generate
meaningful cash flow for years to come. We are able to evaluate and
quickly execute on accretive acquisition opportunities that meet
our long-standing and proven criteria. We’ll continue to evaluate
opportunities to be more active in our drilling program; however,
our near-term focus is on continuing to improve our leverage
profile and maintain our financial flexibility. We remain committed
to growing shareholder value and are well positioned for future
success.”
Production, Prices, and
Revenue: Production for the second quarter of
2022 was 42.4 MBoe/d, which surpassed the top end of the Company’s
guidance range provided for the quarter. W&T benefited from a
full quarter of production from acquisitions announced earlier this
year. This represented an increase of 12% compared to the first
quarter of 2022 and an increase of 4% from 40.9 MBoe/d for the
corresponding period in 2021. Second quarter 2022 production was
comprised of 16.2 MBbl/d of oil (38%), 4.2 MBbl/d of natural gas
liquids (10%) (“NGLs”), and 131.8 million cubic feet per day
(“MMcf/d”) of natural gas (52%). W&T increased its full year
2022 production guidance to 39,500 to 42,000 Boe/d from its prior
estimate of 38,200 to 42,200 Boe/d, an increase of 2% at the
mid-point of Company guidance.
W&T’s average realized price per barrel of
oil equivalent (“Boe”) before realized derivative settlements was
$69.55 per Boe in the second quarter of 2022, an increase of 26%
from $55.29 per Boe in the first quarter of 2022 and an increase of
100% from $34.75 per Boe in the second quarter of 2021. Crude oil,
NGL, and natural gas prices, before realized derivative
settlements, for the second quarter of 2022 were $107.90 per
barrel, $43.58 per barrel, and $7.70 per Mcf, respectively.
Revenues for the second quarter of 2022 were
$273.8 million, which were 43% higher than first quarter 2022
revenue of $191.0 million and 106% higher than $132.8 million in
the second quarter of 2021.
Lease Operating
Expense: Lease operating expense (“LOE”), which
includes base lease operating expenses, insurance premiums,
workovers, facilities maintenance, and hurricane repairs, was $53.0
million in the second quarter of 2022, which was below the low end
of the guidance range for the quarter due to certain discretionary
maintenance activities being deferred until the second half of
2022. This compared to $43.4 million in the first quarter of 2022
and $47.6 million for the corresponding period in 2021. On a
component basis for the second quarter of 2022, base LOE and
insurance premiums were $43.7 million, workovers were $2.7 million,
and facilities maintenance expenses were $6.8 million. On a unit of
production basis, LOE was $13.73 per Boe in the second quarter of
2022. This compares to $12.78 per Boe for the first quarter of 2022
and $12.78 per Boe for the second quarter of 2021.
Gathering, Transportation Costs, and
Production Taxes: Gathering, transportation costs, and
production taxes totaled $9.2 million ($2.38 per Boe) in the second
quarter of 2022, compared to $5.3 million ($1.55 per Boe) in the
first quarter of 2022 and $6.8 million ($1.82 per Boe) in the
second quarter of 2021.
Depreciation, Depletion, Amortization,
and Accretion (“DD&A”): DD&A,
including accretion expense related to asset retirement obligations
(“ARO”), was $8.90 per Boe in the second quarter of 2022. This
compares to $9.10 per Boe and $8.32 per Boe for the first quarter
of 2022 and the second quarter of 2021,
respectively.
General & Administrative Expenses
(“G&A”): G&A was $15.0 million for the
second quarter of 2022, below the midpoint of guidance for the
quarter. This compares to $13.8 million in the first quarter of
2022 and $14.0 million in the second quarter of 2021. On a unit of
production basis, G&A was $3.88 per Boe in the second quarter
of 2022 compared to $4.05 per Boe in the first quarter of 2022 and
$3.76 per Boe in the corresponding period of 2021.
Derivative (Gain) Loss:
In the second quarter of 2022, W&T recognized a net gain of
$8.9 million related to commodity derivative activities, including
the monetization of value associated with resetting strike prices
on outstanding natural gas purchased call options covering the
second half of 2022 through the first quarter of 2025. The Company
recognized a net gain of $138.0 million and received net proceeds
of $105.3 million as a result of the restriking
transaction. Other realized settlements, net of option
premium amortization, resulted in a loss of $58.4 million in the
second quarter of 2022. The change in value of outstanding
derivative contracts since the end of the first quarter of 2022
resulted in an unrealized loss of $70.8 million for the quarter
ended June 30, 2022. The Company recognized a net loss of $80.0
million in the first quarter of 2022 and a net loss of $81.4
million in the second quarter of 2021 related to commodity
derivative activities.
For the remainder of 2022, W&T is
approximately 25% hedged for oil and is fully hedged for natural
gas. As part of the monetization described above, the Company
restructured its purchased call options on natural gas to increase
the weighted-average strike price to $7.48 per MMBTU from $3.78 per
MMBTU for the balance of 2022. These calls cover approximately 85%
of its anticipated natural gas production for the balance of 2022.
A significant portion of the 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 entered
into by borrowers owned by the Company’s wholly-owned subsidiary
Aquasition Energy LLC and will continue through the life of that
loan.
A summary of the Company’s current outstanding
derivative positions is provided on W&T’s website in the
“Investors” section under the “Financial Information” tab.
Interest Expense: Net
interest expense in the second quarter of 2022 was
$18.2 million compared to $19.9 million in the first quarter
of 2022 and $16.5 million in the second quarter of 2021. The
increase in expense year-over-year reflects the increase in total
debt due to the incurrance of the non-recourse Mobile Bay term loan
by certain wholly-owned subsidiaries in May of 2021.
Income Tax: W&T
recognized income tax expense of $31.1 million in the second
quarter of 2022, a substantial majority of which was deferred. This
compares to the recognition of an income tax benefit of $0.7
million and $12.7 million for the quarters ended March 31, 2022 and
June 30, 2021, respectively.
Balance Sheet and
Liquidity: As of June 30, 2022, W&T had
available liquidity of $427.7 million comprised of $377.7 million
in cash and cash equivalents and $50.0 million of borrowing
availability under W&T’s first priority lien secured revolving
facility. At quarter-end, the Company had total debt of $709.2
million (or Net Debt of $331.4 million, net of cash and cash
equivalents), consisting of the balance of the non-recourse Mobile
Bay term loan of $160.3 million and $548.8 million of 9.75% Senior
Second Lien Notes, net of unamortized debt issuance costs for both
instruments. Total debt decreased by $11.2 million
during the second quarter. Net Debt decreased by $173.4 million in
the second quarter of 2022 due to the increase in cash and cash
equivalents attributable to the aforementioned hedge monetization
transaction and strong cash flows throughout the quarter driven by
high oil and gas prices.
As of June 30, 2022, Net Debt to TTM Adjusted
EBITDA was 0.7 times. Assuming recent strip pricing for the
remainder of 2022, no additional acquisitions for the remainder of
the year, and no equity issuances by the Company, including under
the Company’s existing At-The-Market Equity Distribution program,
W&T estimates that Net Debt to TTM Adjusted EBITDA will decline
to approximately 0.5 times.
The Company continues to monitor the debt
capital markets to refinance all or a portion of the Senior Second
Lien Notes.
Regarding the approaching maturity of the
Company’s 9.75% Senior Second Lien Notes (due November 2023), Mr.
Krohn commented, “Our preference is to refinance the outstanding
Second Lien Notes with financing providing longer tenors and
market-based covenants at an attractive interest rate. However,
should the debt market continue to be difficult to access due to
market volatility, we believe there is a path for the Company to
pay off those notes at maturity. Strong anticipated future cash
flows, combined with our significant cash position, availability
under our undrawn credit facility, and, if needed, access to our
unused at-the-market equity program, give us confidence that we
will be able to address those notes in the event that we are not
able to access the debt markets at a reasonable cost.”
Capital Expenditures and
Acquisitions: Capital expenditures (excluding changes in
working capital associated with investing activities) in the second
quarter of 2022 were $8.1 million. Additionally, the Company spent
$17.5 million to acquire the remaining 20% working interests in the
Ship Shoal 230, South Marsh Island/Vermilion 191, and South Marsh
Island 73 fields.
MID-YEAR 2022 PROVED
RESERVES
As calculated by NSAI, W&T’s independent
reserve engineering consultants, proved reserves using SEC pricing
methodology totaled 168.3 MMBoe, compared with 157.6 MMBoe at
year-end 2021. The increase in proved reserves is the result of
positive performance revisions of 6.3 MMBoe, positive price
revisions of 6.3 MMBoe, and the purchase of minerals in place of
5.3 MMBoe, partially offset by 7.3 MMBoe of production in the first
half of 2022. The mid-year proved reserves, which were 88% proved
developed and proved developed non-producing, were 35% liquids.
Utilizing NYMEX strip pricing as of July 19, 2022, mid-year proved
reserves were 164.1 MMBoe.
The pre-tax PV-10 of the mid-year 2022 proved
reserves using SEC pricing was $2.6 billion (before consideration
of expenditures for asset retirement obligations), an increase of
62% compared with the PV-10 of $1.6 billion at year-end 2021 using
SEC pricing. Using NYMEX strip pricing as of July 19, 2022, the
PV-10 the mid-year reserves was $2.3 billion.
Mid-year 2022 SEC proved reserves and PV-10 were
based on an average 12-month crude oil and natural gas prices of
$85.82 per barrel and $5.13 per Mcf, respectively. Prices used to
determine proved reserves and PV-10 for year-end 2021 were $66.55
per barrel of oil and $3.60 per Mcf of natural gas.
2022 CAPITAL INVESTMENT
PROGRAM
W&T’s range for capital expenditures in 2022
remains unchanged at $70 million to $90 million for the full year,
which excludes acquisition opportunities. Included in this range
are planned expenditures related to one deepwater well and three
shelf wells, as well as capital costs for facilities, leasehold,
seismic, and recompletions. The Company has significant flexibility
to adjust its spending since it has no long-term rig commitments or
near-term drilling obligations.
Similarly, the range for plugging and
abandonment expenditures remains unchanged in the range of $55
million to $75 million, driven by obligations and prior
Covid-19-related deferrals on terminated leases with U.S. Bureau of
Safety and Environmental Enforcement (“BSEE”) deadlines before
year-end 2022. The Company spent $34.3 million on ARO
settlements in the second quarter of 2022.
OPERATIONS UPDATE
The Company is continuing preparations to drill
the Holy Grail well at Garden Banks 783 in the Magnolia Field. The
well is expected to commence drilling in the first quarter of
2023.
Well Recompletions and
Workovers
During the second quarter of 2022, the Company
performed two recompletions and four workovers that positively
impacted production for the quarter. W&T plans to continue to
perform recompletions and workovers that meet its economic
thresholds.
Third Quarter and Full Year 2022
Production and Expense Guidance
The guidance for the third quarter and full year
2022 in the table below represents the Company’s current
expectations. Please refer to the section entitled “Forward-Looking
and Cautionary Statements” below for risk factors that could impact
guidance.
Production |
Third Quarter 2022 |
Full Year 2022 |
Oil (MBbl) |
1,350 – 1,550 |
5,450 – 5,800 |
NGLs (MBbl) |
335 – 375 |
1,420 – 1,500 |
Natural gas (MMcf) |
11,300 – 12,800 |
45,300 – 48,200 |
Total equivalents (MBoe) |
3,550 – 4,050 |
14,450 – 15,450 |
Average daily equivalents (MBoe/d) |
39.0 – 44.0 |
39.5 – 42.0 |
|
|
|
Expenses |
Third Quarter 2022 |
Full Year 2022 |
Lease operating expense ($MM) |
$55.0 – $62.0 |
$200.0 – $210.0 |
Gathering, transportation & production taxes ($MM) |
$11.0 – $12.5 |
$36.5 – $39.5 |
|
|
|
General & administrative - cash ($MM) |
$15.0 – $17.0 |
$56.0 – $59.0 |
General & administrative – non-cash ($MM) |
$2.5 – $2.7 |
$7.5 – $8.0 |
|
|
|
DD&A ($ per Boe) |
|
$8.50 – $9.50 |
Interest expense, net ($MM) |
$17.3 – $19.1 |
$73.0 – $77.0 |
Effective income tax expense rate |
|
20% - 21% |
Approximate percentage of income tax expense expected to be cash
taxes |
|
11% |
|
|
|
Conference Call
Information: W&T will hold a conference
call to discuss its financial and operational results on Monday,
August 8, 2022 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 June 30, 2022, the Company had working interests in 47 fields
in federal and state waters and has under lease approximately
637,000 gross acres, including approximately 462,000 gross acres on
the Gulf of Mexico Shelf and approximately 175,000 gross acres in
the Gulf of Mexico deepwater. A majority of the
Company’s daily production is derived from wells it operates. For
more information on W&T, please visit the Company’s website at
www.wtoffshore.com.
Forward-Looking and Cautionary
Statements
This press release contains forward-looking
statements within the meaning of Section 27A of the Securities Act
of 1933, as amended, and Section 21E of the Securities Exchange Act
of 1934, as amended. These forward-looking statements, including
but not limited to, any forward-looking guidance provided herein,
reflect our current views with respect to future events, based on
what we believe are reasonable estimates and assumptions. No
assurance can be given, however, that these events will occur or
that our estimates will be correct. These statements are subject to
risks and uncertainties that could cause actual results to differ
materially including, among other things, market conditions, oil
and gas price volatility, uncertainties inherent in oil and gas
production operations and estimating reserves, uncertainties of the
timing and impact of bringing new wells online and repairing and
restoring infrastructure hurricane damage, the ability to achieve
leverage targets, unexpected future capital expenditures,
competition, the success of our risk management activities,
governmental regulations, uncertainties and other factors discussed
in W&T Offshore’s Annual Report on Form 10-K for the year ended
December 31, 2021 and subsequent Form 10-Q reports found at
www.sec.gov or on our website at www.wtoffshore.com under the
Investor Relations section. Our forward-looking statements in this
press release are based upon assumptions made, and information
known, by the Company as of the date of this release; it should not
be assumed that the Company will undertake to revise or update any
such forward-looking statements as such assumptions and information
changes, except as required under applicable law. Future leverage
ratio estimates (Net Debt to TTM Adjusted EBITDA) made in this
press release assumes no significant change in total debt and no
projected impact of future acquisitions, which may affect this
ratio. Investors are urged to consider closely the disclosures and
risk factors in these reports. Additionally, estimates of proved
and probable reserves included in this release using alternate
pricing methodologies will differ from those estimated using SEC
rules and guidelines, including the SEC’s convention of using a
twelve-month average for commodity pricing.
W&T
OFFSHORE, INC. AND SUBSIDIARIES |
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, |
|
|
June 30, |
|
|
2022 |
|
2022 |
|
2021 |
|
2022 |
|
2021 |
|
|
|
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil |
|
$ |
159,264 |
|
$ |
122,702 |
|
$ |
88,013 |
|
|
$ |
281,966 |
|
|
$ |
166,153 |
|
NGLs |
|
|
16,735 |
|
|
13,820 |
|
|
8,833 |
|
|
|
30,555 |
|
|
|
18,193 |
|
Natural gas |
|
|
92,413 |
|
|
51,366 |
|
|
32,470 |
|
|
|
143,779 |
|
|
|
68,679 |
|
Other |
|
|
5,396 |
|
|
3,116 |
|
|
3,512 |
|
|
|
8,512 |
|
|
|
5,451 |
|
Total revenues |
|
|
273,808 |
|
|
191,004 |
|
|
132,828 |
|
|
|
464,812 |
|
|
|
258,476 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
costs and expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Lease operating expenses |
|
|
52,976 |
|
|
43,411 |
|
|
47,552 |
|
|
|
96,387 |
|
|
|
89,909 |
|
Gathering, transportation costs and production taxes |
|
|
9,181 |
|
|
5,267 |
|
|
6,780 |
|
|
|
14,448 |
|
|
|
13,095 |
|
Depreciation, depletion, amortization and accretion |
|
|
34,360 |
|
|
30,911 |
|
|
30,952 |
|
|
|
65,271 |
|
|
|
57,589 |
|
General and administrative expenses |
|
|
14,967 |
|
|
13,776 |
|
|
13,986 |
|
|
|
28,743 |
|
|
|
24,698 |
|
Total costs and expenses |
|
|
111,484 |
|
|
93,365 |
|
|
99,270 |
|
|
|
204,849 |
|
|
|
185,291 |
|
Operating income |
|
|
162,324 |
|
|
97,639 |
|
|
33,558 |
|
|
|
259,963 |
|
|
|
73,185 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
expense, net |
|
|
18,183 |
|
|
19,883 |
|
|
16,530 |
|
|
|
38,066 |
|
|
|
31,564 |
|
Derivative
(gain) loss |
|
|
(8,854 |
) |
|
79,997 |
|
|
81,440 |
|
|
|
71,143 |
|
|
|
106,020 |
|
Other
(income) expense, net |
|
|
(1,534 |
) |
|
905 |
|
|
- |
|
|
|
(629 |
) |
|
|
963 |
|
Income (loss) before income taxes |
|
|
154,529 |
|
|
(3,146 |
) |
|
(64,412 |
) |
|
|
151,383 |
|
|
|
(65,362 |
) |
Income tax
expense (benefit) |
|
|
31,093 |
|
|
(689 |
) |
|
(12,740 |
) |
|
|
30,404 |
|
|
|
(12,944 |
) |
Net income (loss) |
|
$ |
123,436 |
|
$ |
(2,457 |
) |
$ |
(51,672 |
) |
|
$ |
120,979 |
|
|
$ |
(52,418 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
(loss) per common share |
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.86 |
|
$ |
(0.02 |
) |
$ |
(0.36 |
) |
|
$ |
0.85 |
|
|
$ |
(0.37 |
) |
Diluted |
|
$ |
0.85 |
|
$ |
(0.02 |
) |
$ |
(0.36 |
) |
|
$ |
0.84 |
|
|
$ |
(0.37 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
average common shares outstanding |
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
143,020 |
|
|
142,942 |
|
|
142,244 |
|
|
|
142,981 |
|
|
|
142,197 |
|
Diluted |
|
|
144,525 |
|
|
142,942 |
|
|
142,244 |
|
|
|
144,094 |
|
|
|
142,197 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
W&T
OFFSHORE, INC. AND SUBSIDIARIES |
Condensed
Operating Data |
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended |
|
Six Months
Ended |
|
|
|
June 30, |
|
|
March 31, |
|
|
June 30, |
|
|
June 30, |
|
|
2022 |
|
2022 |
|
2021 |
|
|
2022 |
|
2021 |
Net sales
volumes: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil (MBbls) |
|
|
1,476 |
|
|
1,304 |
|
|
1,352 |
|
|
|
2,780 |
|
|
2,729 |
NGL (MBbls) |
|
|
384 |
|
|
349 |
|
|
337 |
|
|
|
733 |
|
|
729 |
Natural gas (MMcf) |
|
|
11,995 |
|
|
10,471 |
|
|
12,189 |
|
|
|
22,466 |
|
|
22,988 |
Total oil and natural gas (MBoe)(1) |
|
|
3,859 |
|
|
3,398 |
|
|
3,721 |
|
|
|
7,257 |
|
|
7,290 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average
daily equivalent sales (MBoe/d) |
|
|
42.4 |
|
|
37.8 |
|
|
40.9 |
|
|
|
40.1 |
|
|
40.3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average realized sales prices (before the impact of derivitive
settlements): |
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil ($/Bbl) |
|
$ |
107.90 |
|
$ |
94.10 |
|
$ |
65.11 |
|
|
$ |
101.43 |
|
$ |
60.88 |
NGLs ($/Bbl) |
|
|
43.58 |
|
|
39.60 |
|
|
26.18 |
|
|
|
41.68 |
|
|
24.94 |
Natural gas ($/Mcf) |
|
|
7.70 |
|
|
4.91 |
|
|
2.66 |
|
|
|
6.40 |
|
|
2.99 |
Barrel of oil equivalent ($/Boe) |
|
|
69.55 |
|
|
55.29 |
|
|
34.75 |
|
|
|
62.88 |
|
|
34.71 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average
costs and expenses per Boe ($/Boe): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lease operating expenses |
|
$ |
13.73 |
|
$ |
12.78 |
|
$ |
12.78 |
|
|
$ |
13.28 |
|
$ |
12.33 |
Gathering, transportation costs and production taxes |
|
|
2.38 |
|
|
1.55 |
|
|
1.82 |
|
|
|
1.99 |
|
|
1.79 |
Depreciation, depletion, amortization and accretion |
|
|
8.90 |
|
|
9.10 |
|
|
8.32 |
|
|
|
8.99 |
|
|
7.90 |
General and administrative expenses |
|
|
3.88 |
|
|
4.05 |
|
|
3.76 |
|
|
|
3.96 |
|
|
3.39 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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. AND SUBSIDIARIES |
Condensed
Consolidated Balance Sheets |
(In
thousands) |
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
June
30, |
|
|
December
31, |
|
|
2022 |
|
|
2021 |
|
|
|
|
|
|
|
|
Assets |
|
|
|
|
|
|
|
Current
assets: |
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
377,724 |
|
|
|
$ |
245,799 |
|
Restricted cash |
|
|
4,417 |
|
|
|
|
4,417 |
|
Receivables: |
|
|
|
|
|
|
|
Oil and natural gas sales |
|
|
99,155 |
|
|
|
|
54,919 |
|
Joint interest, net |
|
|
13,370 |
|
|
|
|
9,745 |
|
Total receivables |
|
|
112,525 |
|
|
|
|
64,664 |
|
Prepaid expenses and other assets |
|
|
53,073 |
|
|
|
|
43,379 |
|
Total current assets |
|
|
547,739 |
|
|
|
|
358,259 |
|
|
|
|
|
|
|
|
|
Oil and natural gas properties and other, net - at cost |
|
|
8,785,744 |
|
|
|
|
8,657,252 |
|
Less accumulated depreciation, depletion, amortization and
impairment |
|
|
8,044,354 |
|
|
|
|
7,992,000 |
|
Oil and natural gas properties and other, net |
|
|
741,390 |
|
|
|
|
665,252 |
|
Restricted deposits for asset retirement obligations |
|
|
21,667 |
|
|
|
|
16,019 |
|
Deferred income taxes |
|
|
75,474 |
|
|
|
|
102,505 |
|
Other assets |
|
|
53,538 |
|
|
|
|
51,172 |
|
Total assets |
|
$ |
1,439,808 |
|
|
|
$ |
1,193,207 |
|
|
|
|
|
|
|
|
|
Liabilities and Shareholders’ Deficit |
|
|
|
|
|
|
|
Current
liabilities: |
|
|
|
|
|
|
|
Accounts payable |
|
$ |
81,031 |
|
|
|
$ |
67,409 |
|
Undistributed oil and natural gas proceeds |
|
|
51,215 |
|
|
|
|
36,243 |
|
Advances from joint interest partners |
|
|
5,259 |
|
|
|
|
15,072 |
|
Asset retirement obligations |
|
|
51,504 |
|
|
|
|
56,419 |
|
Accrued liabilities |
|
|
157,323 |
|
|
|
|
106,273 |
|
Current portion of long-term debt |
|
|
37,199 |
|
|
|
|
42,960 |
|
Total current liabilities |
|
|
383,531 |
|
|
|
|
324,376 |
|
|
|
|
|
|
|
|
|
Long-term
debt, net |
|
|
671,974 |
|
|
|
|
687,938 |
|
Asset
retirement obligations, less current portion |
|
|
409,265 |
|
|
|
|
368,076 |
|
Other
liabilities |
|
|
99,407 |
|
|
|
|
59,997 |
|
Shareholders’ deficit: |
|
|
|
|
|
|
|
Common stock, $0.00001 par value; 200,000 shares authorized;
146,024 issued and 143,154 outstanding at March 31,
2022; 145,732 issued and 142,863 outstanding at December 31,
2021 |
|
|
1 |
|
|
|
|
1 |
|
Additional paid-in capital |
|
|
554,755 |
|
|
|
|
552,923 |
|
Retained deficit |
|
|
(654,958 |
) |
|
|
|
(775,937 |
) |
Treasury stock, at cost; 2,869 shares for both dates presented |
|
|
(24,167 |
) |
|
|
|
(24,167 |
) |
Total shareholders’ deficit |
|
|
(124,369 |
) |
|
|
|
(247,180 |
) |
Total liabilities and shareholders’ deficit |
|
$ |
1,439,808 |
|
|
|
$ |
1,193,207 |
|
|
|
|
|
|
|
|
|
W&T
OFFSHORE, INC. AND SUBSIDIARIES |
Condensed
Consolidated Statements of Cash Flows |
(In
thousands) |
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended |
|
Six Months
Ended |
|
|
June 30, |
|
March 31, |
|
June 30, |
|
June 30, |
|
|
2022 |
|
2022 |
|
2021 |
|
2022 |
2021 |
Operating activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) |
|
$ |
123,436 |
|
|
$ |
(2,457 |
) |
|
$ |
(51,672 |
) |
|
$ |
120,979 |
|
$ |
(52,418 |
) |
Adjustments
to reconcile net income (loss) to net cash provided by operating
activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation, depletion, amortization and accretion |
|
|
34,360 |
|
|
|
30,911 |
|
|
|
30,952 |
|
|
|
65,271 |
|
|
57,589 |
|
Amortization of debt items and other items |
|
|
1,771 |
|
|
|
2,594 |
|
|
|
948 |
|
|
|
4,365 |
|
|
2,967 |
|
Share-based compensation |
|
|
2,014 |
|
|
|
520 |
|
|
|
466 |
|
|
|
2,534 |
|
|
921 |
|
Derivative (gain) loss |
|
|
(8,854 |
) |
|
|
79,997 |
|
|
|
81,440 |
|
|
|
71,143 |
|
|
106,020 |
|
Derivative cash receipts (payments), net |
|
|
100,742 |
|
|
|
(30,515 |
) |
|
|
(36,525 |
) |
|
|
70,227 |
|
|
(41,130 |
) |
Derivative cash premium payments |
|
|
(46,111 |
) |
|
|
- |
|
|
|
- |
|
|
|
(46,111 |
) |
|
- |
|
Deferred income taxes |
|
|
27,764 |
|
|
|
(733 |
) |
|
|
(12,802 |
) |
|
|
27,031 |
|
|
(13,006 |
) |
Changes in operating assets and liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil and natural gas receivables |
|
|
(6,462 |
) |
|
|
(37,774 |
) |
|
|
(289 |
) |
|
|
(44,236 |
) |
|
(11,390 |
) |
Joint interest receivables |
|
|
851 |
|
|
|
(4,476 |
) |
|
|
3,484 |
|
|
|
(3,625 |
) |
|
(910 |
) |
Prepaid expenses and other assets |
|
|
(17,909 |
) |
|
|
(12,183 |
) |
|
|
(10,030 |
) |
|
|
(30,092 |
) |
|
(17,605 |
) |
Income tax |
|
|
3,179 |
|
|
|
44 |
|
|
|
(92 |
) |
|
|
3,223 |
|
|
(92 |
) |
Asset retirement obligation settlements |
|
|
(34,283 |
) |
|
|
(5,492 |
) |
|
|
(10,251 |
) |
|
|
(39,775 |
) |
|
(11,213 |
) |
Cash advances from JV partners |
|
|
(1,263 |
) |
|
|
(8,550 |
) |
|
|
(2,902 |
) |
|
|
(9,813 |
) |
|
(3,925 |
) |
Accounts payable, accrued liabilities and other |
|
|
30,987 |
|
|
|
15,651 |
|
|
|
8,503 |
|
|
|
46,638 |
|
|
30,386 |
|
Net cash provided by operating activities |
|
|
210,222 |
|
|
|
27,537 |
|
|
|
1,230 |
|
|
|
237,759 |
|
|
46,194 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investing activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment
in oil and natural gas properties, equipment, and other |
|
|
(8,050 |
) |
|
|
(17,439 |
) |
|
|
(4,281 |
) |
|
|
(25,489 |
) |
|
(5,854 |
) |
Changes in operating assets and liabilities associated with
investing activities |
|
(8,416 |
) |
|
|
2,630 |
|
|
|
(1,320 |
) |
|
|
(5,786 |
) |
|
(3,078 |
) |
Acquisition
of property interests |
|
|
(17,472 |
) |
|
|
(30,153 |
) |
|
|
- |
|
|
|
(47,625 |
) |
|
- |
|
Net cash used in investing activities |
|
|
(33,938 |
) |
|
|
(44,962 |
) |
|
|
(5,601 |
) |
|
|
(78,900 |
) |
|
(8,932 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financing activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Repayments
on credit facility |
|
|
- |
|
|
|
- |
|
|
|
(48,000 |
) |
|
|
- |
|
|
(80,000 |
) |
Proceeds
from Term Loan |
|
|
- |
|
|
|
- |
|
|
|
215,000 |
|
|
|
- |
|
|
215,000 |
|
Repayments
on Term Loan |
|
|
(12,311 |
) |
|
|
(12,630 |
) |
|
|
- |
|
|
|
(24,941 |
) |
|
- |
|
Debt
issuance costs |
|
|
(1,290 |
) |
|
|
- |
|
|
|
(6,840 |
) |
|
|
(1,290 |
) |
|
(6,840 |
) |
Other |
|
|
(434 |
) |
|
|
(269 |
) |
|
|
- |
|
|
|
(703 |
) |
|
- |
|
Net cash (used in) provided by financing activities |
|
|
(14,035 |
) |
|
|
(12,899 |
) |
|
|
160,160 |
|
|
|
(26,934 |
) |
|
128,160 |
|
Increase (decrease) in cash and cash equivalents |
|
|
162,249 |
|
|
|
(30,324 |
) |
|
|
155,789 |
|
|
|
131,925 |
|
|
165,422 |
|
Cash and
cash equivalents and restricted cash, beginning of period |
|
|
219,892 |
|
|
|
250,216 |
|
|
|
53,359 |
|
|
|
250,216 |
|
|
43,726 |
|
Cash and
cash equivalents and restricted cash, end of period |
|
$ |
382,141 |
|
|
$ |
219,892 |
|
|
$ |
209,148 |
|
|
$ |
382,141 |
|
$ |
209,148 |
|
W&T OFFSHORE, INC. AND
SUBSIDIARIESNon-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” and
“Free Cash Flow”. Management uses these non-GAAP financial measures
in its analysis of performance. These disclosures may not be viewed
as a substitute for results determined in accordance with GAAP and
are not necessarily comparable to non-GAAP performance measures
which may be reported by other companies. 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.
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 loss (gain),
amortization and write-off of derivative premium, bad debt reserve,
deferred tax benefit, gain on debt transactions, release of
restricted funds, and litigation and other.
|
|
Three Months
Ended |
|
Six Months
Ended |
|
|
June 30, |
|
March 31, |
|
June 30, |
|
June 30, |
|
|
2022 |
|
2022 |
|
2021 |
|
2022 |
|
2021 |
|
|
(In
thousands, except per share amounts) |
|
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) |
|
$ |
123,436 |
|
|
$ |
(2,457 |
) |
|
$ |
(51,672 |
) |
|
$ |
120,979 |
|
|
$ |
(52,418 |
) |
Selected items |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized
commodity derivative loss |
|
|
70,814 |
|
|
|
36,302 |
|
|
|
66,083 |
|
|
|
107,116 |
|
|
|
82,418 |
|
Amortization
and write-off of derivative premium |
|
|
15,458 |
|
|
|
4,194 |
|
|
|
583 |
|
|
|
19,652 |
|
|
|
1,039 |
|
Allowance
for credit losses |
|
|
181 |
|
|
|
118 |
|
|
|
8 |
|
|
|
299 |
|
|
|
8 |
|
Other |
|
|
(1,534 |
) |
|
|
905 |
|
|
|
40 |
|
|
|
(629 |
) |
|
|
80 |
|
Tax effect
of selected items 1 |
|
|
(17,833 |
) |
|
|
(8,719 |
) |
|
|
(14,010 |
) |
|
|
(26,552 |
) |
|
|
(17,544 |
) |
Adjusted Net Income |
|
$ |
190,522 |
|
|
$ |
30,343 |
|
|
$ |
1,032 |
|
|
$ |
220,865 |
|
|
$ |
13,583 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
earnings per common share |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
1.33 |
|
|
$ |
0.21 |
|
|
$ |
0.01 |
|
|
$ |
1.54 |
|
|
$ |
0.10 |
|
Diluted |
|
$ |
1.32 |
|
|
$ |
0.21 |
|
|
$ |
0.01 |
|
|
$ |
1.53 |
|
|
$ |
0.09 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
Average Shares Outstanding |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
143,020 |
|
|
|
142,942 |
|
|
|
142,244 |
|
|
|
142,981 |
|
- |
- |
142,197 |
|
Diluted |
|
|
144,525 |
|
|
|
143,658 |
|
|
|
143,124 |
|
|
|
144,094 |
|
|
|
143,096 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Selected items
were tax effected with the Federal Statutory Rate of 21% for each
respective period. |
W&T OFFSHORE, INC. AND
SUBSIDIARIESNon-GAAP Information
Adjusted EBITDA/ Free Cash Flow
Reconciliations
The Company also presents the non-GAAP financial
measures Adjusted EBITDA and Free Cash Flow. The Company defines
Adjusted EBITDA as net (loss) income plus income tax (benefit)
expense, net interest expense, and depreciation, depletion,
amortization and accretion, excluding the unrealized commodity
derivative gain or loss, amortization and write-off of derivative
premium, bad debt reserve, gain on debt transactions, release of
restricted funds, and litigation, share-based compensation, and
other. Company management believes this presentation is relevant
and useful because it helps investors understand W&T’s
operating performance and makes it easier to compare its results
with those of other companies that have different financing,
capital and tax structures. Adjusted EBITDA should not be
considered in isolation from or as a substitute for net income, as
an indication of operating performance or cash flows from operating
activities or as a measure of liquidity. Adjusted EBITDA, as
W&T calculates it, may not be comparable to Adjusted EBITDA
measures reported by other companies. In addition, Adjusted EBITDA
does not represent funds available for discretionary use.
The Company defines Free Cash Flow as Adjusted
EBITDA (defined above), less capital expenditures, plugging and
abandonment costs and interest expense (all on an accrual basis).
For this purpose, the Company’s definition of capital expenditures
includes costs incurred related to oil and natural gas properties
(such as drilling and infrastructure costs and the lease
maintenance costs) and equipment, furniture and fixtures, but
excludes acquisition costs of oil and gas properties from third
parties that are not included in the Company’s capital expenditures
guidance provided to investors. Company management believes that
Free Cash Flow is an important financial performance measure for
use in evaluating the performance and efficiency of its current
operating activities after the impact of accrued capital
expenditures, plugging and abandonment costs and interest expense
and without being impacted by items such as changes associated with
working capital, which can vary substantially from one period to
another. There is no commonly accepted definition 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 interest expense in the
calculation of Free Cash Flow, other mandatory debt service
requirements of future payments of principal at maturity (if such
debt is not refinanced) are excluded from the calculation of Free
Cash Flow. These and other non-discretionary expenditures that are
not deducted from Free Cash Flow would reduce cash available for
other uses.
The following tables present (i) a
reconciliation of cash flow from operating activities, a GAAP
measure, to Free Cash Flow, as defined by the Company and (ii) a
reconciliation of the Company’s net (loss) income, a GAAP measure,
to Adjusted EBITDA and Free Cash Flow, as such terms are defined by
the Company.
|
|
Three Months Ended |
|
Six Months Ended |
|
|
June 30, |
|
March 31, |
|
June 30, |
|
June 30, |
|
|
2022 |
|
2022 |
|
2021 |
|
2022 |
|
2021 |
|
|
(In thousands) |
|
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) |
|
$ |
123,436 |
|
|
$ |
(2,457 |
) |
|
$ |
(51,672 |
) |
|
$ |
120,979 |
|
|
$ |
(52,418 |
) |
Interest expense, net |
|
|
18,183 |
|
|
|
19,883 |
|
|
|
16,530 |
|
|
|
38,066 |
|
|
|
31,564 |
|
Income tax expense (benefit) |
|
|
31,093 |
|
|
|
(689 |
) |
|
|
(12,740 |
) |
|
|
30,404 |
|
|
|
(12,944 |
) |
Depreciation, depletion,
amortization and accretion |
|
|
34,360 |
|
|
|
30,911 |
|
|
|
30,952 |
|
|
|
65,271 |
|
|
|
57,589 |
|
Unrealized commodity derivative
loss |
|
|
70,814 |
|
|
|
36,302 |
|
|
|
66,083 |
|
|
|
107,116 |
|
|
|
82,418 |
|
Amortization and write-off of
derivative premium |
|
|
15,458 |
|
|
|
4,194 |
|
|
|
583 |
|
|
|
19,652 |
|
|
|
1,039 |
|
Allowance for credit losses |
|
|
181 |
|
|
|
118 |
|
|
|
8 |
|
|
|
299 |
|
|
|
8 |
|
Non-cash incentive
compensation |
|
|
2,014 |
|
|
|
520 |
|
|
|
466 |
|
|
|
2,534 |
|
|
|
921 |
|
Other |
|
|
(1,534 |
) |
|
|
905 |
|
|
|
40 |
|
|
|
(629 |
) |
|
|
80 |
|
Adjusted
EBITDA |
|
$ |
294,005 |
|
|
$ |
89,687 |
|
|
$ |
50,250 |
|
|
$ |
383,692 |
|
|
$ |
108,257 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment in oil and natural
gas properties, equipment and other |
|
|
(8,050 |
) |
|
|
(17,439 |
) |
|
|
(4,281 |
) |
|
|
(25,489 |
) |
|
|
(5,854 |
) |
Asset retirement obligation
settlements |
|
|
(34,283 |
) |
|
|
(5,492 |
) |
|
|
(10,251 |
) |
|
|
(39,775 |
) |
|
|
(11,213 |
) |
Interest expense, net |
|
|
(18,183 |
) |
|
|
(19,883 |
) |
|
|
(16,530 |
) |
|
|
(38,066 |
) |
|
|
(31,564 |
) |
Free Cash
Flow |
|
$ |
233,489 |
|
|
$ |
46,873 |
|
|
$ |
19,188 |
|
|
$ |
280,362 |
|
|
$ |
59,626 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended |
|
Six Months
Ended |
|
|
June 30, |
|
|
March 31, |
|
|
June 30, |
|
|
June 30, |
|
|
June 30, |
|
|
2022 |
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
|
(In thousands) |
|
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash
provided by operating activities |
$ |
210,222 |
|
|
$ |
27,537 |
|
|
$ |
1,230 |
|
|
$ |
237,759 |
|
|
$ |
46,194 |
|
Allowance
for credit losses |
|
181 |
|
|
|
118 |
|
|
|
8 |
|
|
|
299 |
|
|
|
8 |
|
Litigation
and other contingent loss |
|
(1,534 |
) |
|
|
905 |
|
|
|
40 |
|
|
|
(629 |
) |
|
|
80 |
|
Amortization
of debt items and other items |
|
(1,771 |
) |
|
|
(2,594 |
) |
|
|
(948 |
) |
|
|
(4,365 |
) |
|
|
(2,967 |
) |
Current tax
benefit (1) |
|
3,329 |
|
|
|
44 |
|
|
|
62 |
|
|
|
3,373 |
|
|
|
62 |
|
Changes in
derivatives receivable (payable) (1) |
|
40,495 |
|
|
|
(8,986 |
) |
|
|
21,751 |
|
|
|
31,509 |
|
|
|
18,567 |
|
Changes in operating assets and liabilities, excluding asset
retirement obligation settlements |
|
(9,383 |
) |
|
|
47,288 |
|
|
|
1,326 |
|
|
|
37,905 |
|
|
|
3,536 |
|
|
|
|
|
|
|
|
|
|
Investment
in oil and natural gas properties, equipment and other |
|
(8,050 |
) |
|
|
(17,439 |
) |
|
|
(4,281 |
) |
|
|
(25,489 |
) |
|
|
(5,854 |
) |
Free Cash
Flow |
$ |
233,489 |
|
|
$ |
46,873 |
|
|
$ |
19,188 |
|
|
$ |
280,362 |
|
|
$ |
59,626 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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 (benefit) |
$ |
31,093 |
|
|
$ |
(689 |
) |
|
$ |
(12,740 |
) |
|
$ |
30,404 |
|
|
$ |
(12,944 |
) |
Less:
Deferred income taxes |
|
27,764 |
|
|
|
(733 |
) |
|
|
(12,802 |
) |
|
|
27,031 |
|
|
|
(13,006 |
) |
Current tax
benefit |
$ |
3,329 |
|
|
$ |
44 |
|
|
$ |
62 |
|
|
$ |
3,373 |
|
|
$ |
62 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Changes in
derivatives receivable: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivatives
payable, end of period |
$ |
(20,998 |
) |
|
$ |
(15,382 |
) |
|
$ |
(7,289 |
) |
|
$ |
(20,998 |
) |
|
$ |
(7,289 |
) |
Derivatives
payable, beginning of period |
|
15,382 |
|
|
|
6,396 |
|
|
|
3,465 |
|
|
|
6,396 |
|
|
|
281 |
|
Derivative
premiums paid |
|
46,111 |
|
|
|
- |
|
|
|
25,575 |
|
|
|
46,111 |
|
|
|
25,575 |
|
Change in
derivatives receivable (payable) |
$ |
40,495 |
|
|
$ |
(8,986 |
) |
|
$ |
21,751 |
|
|
$ |
31,509 |
|
|
$ |
18,567 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SUPPLEMENTAL INFORMATION CONCERNING
AQUASITION MOBILE BAY SUBSIDIARIES
|
Aquasition Energy LLC |
Remaining W&T Offshore |
W&T Offshore, Inc. Consolidated |
06/30/22
Proved Reserve Info – SEC Pricing Methodology |
Total oil reserves (MMBbl) |
0.2 |
40.4 |
40.7 |
Total NGL reserves (MMBbl) |
14.5 |
4.4 |
18.8 |
Total natural gas reserves (Bcf) |
474.0 |
178.8 |
652.8 |
Total equivalent reserves (MMBoe) |
93.7 |
74.6 |
168.3 |
|
|
|
|
Proved developed producing reserves (MMBoe) |
90.0 |
38.9 |
128.9 |
Proved developed non-producing reserves (MMBoe) |
3.7 |
15.0 |
18.7 |
Proved undeveloped reserves (MMBoe) |
- |
20.6 |
20.6 |
Total equivalent reserves (MMBoe) |
93.7 |
74.6 |
168.3 |
|
|
|
|
Proved developed producing PV-10 ($MM) |
$924.3 |
$1,057.4 |
$1,981.7 |
Proved developed non-producing PV-10 ($MM) |
50.8 |
253.0 |
303.7 |
Proved undeveloped PV-10 ($MM) |
- |
336.9 |
336.9 |
Total PV-10 ($MM) |
$975.1 |
$1,647.3 |
$2,622.3 |
The following alternative NYMEX case price proved reserves
estimates are internally generated and based on NYMEX futures
contract prices of oil and natural gas quoted on NYMEX as of July
19, 2022, which results in a volume-weighted average NYMEX price
over the life of our proved reserves of $75.13 per barrel and $4.69
per Mcf, before differentials, for oil and natural gas,
respectively. NYMEX case reserves were determined using (i)
individual monthly futures contract prices for July 2022 through
June 2023 (ii) quarterly average of monthly contract prices for the
second half of 2023 and 2024, (iii) annual averages of monthly
contract prices for each of 2025 and 2026 and (iv) for 2027 and
later years, an average of all monthly contract prices from 2027 to
the latest date which forward contract prices are quoted by NYMEX
for oil or natural gas. In determining NYMEX case NGLs prices, a
price ratio was computed for each field with NGL production and
applied to the applicable NYMEX crude oil price stated above for
each future production period.
|
Aquasition Energy LLC |
Remaining W&T Offshore |
W&T Offshore, Inc. Consolidated |
06/30/22 Proved Reserve Info – Alternate NYMEX Price Case
(Forward Strip as of July 19, 2022) |
Total oil reserves (MMBbl) |
0.2 |
39.2 |
39.4 |
Total NGL reserves (MMBbl) |
14.2 |
4.3 |
18.5 |
Total natural gas reserves (Bcf) |
464.2 |
173.2 |
637.3 |
Total equivalent reserves (MMBoe) |
91.8 |
72.3 |
164.1 |
|
|
|
|
Proved developed producing reserves (MMBoe) |
88.1 |
37.6 |
125.7 |
Proved developed non-producing reserves (MMBoe) |
3.7 |
14.2 |
17.8 |
Proved undeveloped reserves (MMBoe) |
- |
20.6 |
20.6 |
Total equivalent reserves (MMBoe) |
91.8 |
72.3 |
164.1 |
|
|
|
|
Proved developed producing PV-10 ($MM) |
$832.8 |
$971.8 |
$1,804.6 |
Proved developed non-producing PV-10 ($MM) |
44.9 |
204.7 |
249.6 |
Proved undeveloped PV-10 ($MM) |
- |
227.7 |
227.7 |
Total PV-10 ($MM) |
$877.7 |
$1,404.2 |
$2,281.9 |
|
Aquasition Energy LLC |
Remaining W&T Offshore |
W&T Offshore, Inc. Consolidated |
2Q22 Information |
|
|
|
Oil production (MBbl) |
4 |
1,472 |
1,476 |
NGL production (MBbl) |
242 |
142 |
384 |
Natural gas production (MMcf) |
7,837 |
4,158 |
11,995 |
Total equivalent production (MBoe) |
1,552 |
2,307 |
3,859 |
|
|
|
|
Adjusted EBITDA ($MM) |
$21.4 |
$272.6 |
$294.0 |
|
|
|
|
Note: Totals in the tables above may not compute
due to rounding. The Company defines PV-10 in the above tables as
present value of estimated future net revenues from proved reserves
excluding the effects of future costs of asset retirement
obligations, general and administrative expenses, derivatives, debt
service and income taxes. Year-end PV-10 for total proved reserves
(SEC Pricing) is a non-GAAP financial measure.
Proved reserves based on the Alternate NYMEX
Price Case (forward strip pricing as of July 19, 2022) are
presented in the above table solely to demonstrate the sensitivity
of our proved reserves and related PV-10 estimates to changes in
pricing to recent futures contract pricing levels. Neither PV-10 at
SEC Pricing or NYMEX Price Case should be viewed as representing a
current market value of our estimated proved oil and gas reserves,
nor is recent futures contract pricing indicative of actual pricing
that we may realize in the future for production of our
reserves.
CONTACT: |
|
Al PetrieInvestor Relations
Coordinatorapetrie@wtoffshore.com713-297-8024 |
|
Brent CollinsDirector of Investor
Relationsbcollins1@wtoffshore.com713-624-7364 |
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