W&T Offshore, Inc. (NYSE: WTI) (“W&T” or the “Company”)
today reported operational and financial results for the fourth
quarter and full year 2023, including the Company’s year-end 2023
reserve report. Detailed guidance for the first quarter of 2024 and
full year 2024 was also provided, and W&T announced its
dividend for the first quarter of 2024. This press release includes
non-GAAP financial measures, including Adjusted Net (Loss) Income,
Adjusted EBITDA, Free Cash Flow, Net Debt and PV-10 which are
described and reconciled to the most comparable GAAP measures below
in the accompanying tables under “Non-GAAP Information.” Key
highlights for the fourth quarter and full year 2023 and since
year-end 2023 included:
- Completed two
accretive acquisitions of producing properties for a total of $99.4
million, or approximately $4.75 per barrel of oil equivalent
(“Boe”);
- Acquired six
shallow water Gulf of Mexico (“GOM”) fields in January 2024 (“the
Cox acquisition”), all of which are 100% working interest and
located adjacent to existing W&T operations, for $72.0
million;
- Purchased working
interests in eight shallow water GOM fields in September 2023 for
$27.4 million;
- Both acquisitions
were funded with cash on hand, which increases proved reserves,
production and Free Cash Flow per share;
- Delivered strong production in full
year 2023 of 34.9 thousand barrels of oil equivalent per day
(“MBoe/d”) (51% liquids), or 12.7 million barrels of oil equivalent
(“MMBoe”), at the midpoint of latest guidance;
- Production was 34.1 Mboe/d (49%
liquids), or 3.1 MMBoe in the fourth quarter of 2023;
- Reported net income
for full year 2023 of $15.6 million, or $0.11 per diluted share and
fourth quarter 2023 net loss of $0.4 million or ($0.00) per diluted
share;
- Adjusted Net Loss
totaled $21.7 million, or ($0.15) per share for full year 2023 and
$8.7 million, or ($0.06) per share for the fourth quarter 2023,
which excludes the net unrealized gain on outstanding derivative
contracts, non-ARO plugging and abandonment (“P&A”) costs and
non-recurring costs related to the Company’s IT services
transition;
- Generated solid
Adjusted EBITDA in the fourth quarter 2023 of $44.9 million and
$183.2 million in full year 2023;
- Produced net cash
from operating activities of $35.7 million and Free Cash Flow of
$15.8 million in the fourth quarter 2023, marking the 24th
consecutive quarter of positive Free Cash Flow;
- In full year 2023,
generated net cash from operating activities of $115.3 million and
$63.3 million of Free Cash Flow, further strengthening the balance
sheet and allowing W&T to fund accretive acquisitions;
- Grew cash and cash
equivalents to $173.3 million at December 31, 2023 from $149.0
million at September 30,2023;
- Reported Net Debt
of $217.3 million as of December 31, 2023, compared with Net Debt
of $232.1 million a year ago;
- Continued to
maintain a low leverage profile with Net Debt to trailing twelve
months (“TTM”) Adjusted EBITDA of 1.2 times;
- Adopted a quarterly
cash dividend policy in November 2023 and paid initial dividend of
$0.01 per common share on December 22, 2023;
- Declared first
quarter 2024 dividend of $0.01 per share which will be payable on
March 25, 2024 to stockholders of record on March 18, 2024;
and
- Announced 2024
guidance including a capital spending budget of $35 to $45
million.
Tracy W. Krohn, W&T’s Board Chair and Chief
Executive Officer, commented, “We continued to deliver solid
results in 2023, while executing on our strategic vision focused on
Free Cash Flow generation. We have reported 24 consecutive quarters
of positive Free Cash Flow and generated Adjusted EBITDA of $183.2
million in 2023. In early 2023, we strengthened our balance sheet
by issuing new 2026 Senior Second Lien Notes and repurchasing all
of our outstanding 2023 Senior Second Lien Notes. These notes are
trading at a premium of approximately 3% to par value as of
February 29, 2024. Our strong balance sheet has allowed us to close
on two accretive acquisitions utilizing a portion of our cash on
hand, which we expect will meaningfully boost our production and
reserve base. We believe these acquisitions will bolster our per
share metrics, increase shareholder value and provide additional
Free Cash Flow, all without using any debt or equity. We plan to
continue to utilize our significant cash position and expertise in
acquiring complementary GOM assets to enhance the scale of W&T.
Acquisitions have been a key component of how we have grown
reserves and production at W&T, and we remain well positioned
to continue to enhance our portfolio through additional attractive
opportunities.”
Mr. Krohn continued, “Turning to our year-end
reserve results, I would like to point out that the recent
acquisition in January 2024, which added 18.7 MMBoe of proved
reserves, is not reflected in these numbers. While the decline in
SEC pricing led to downward revisions in proved reserves, we
continue to see positive well performance resulting in positive
technical revisions. This clearly demonstrates our ability to
enhance production and reserves through operational excellence. In
2023, we had 4.0 MMBoe of positive performance revisions and an
increase of 2.6 MMBoe related to the acquisition we closed in
September. We have built a sustainable group of high performing GOM
assets with good production diversity that is almost evenly
distributed between liquids and natural gas. We expect that our
assets and operational excellence will continue to provide
meaningful cash flow to our shareholders for many years.”
Mr. Krohn concluded, “Looking at 2024 and
beyond, we are integrating our recent acquisitions and believe that
we can materially increase production and reduce costs at the 14
additional fields that we now operate. We are deferring some of our
drilling plans while we complete the integration of those assets
and are exploring a Drilling Joint Venture, similar to the Monza
Energy LLC Joint Venture, which closed in 2018. The new drilling
Joint Venture may include certain of the Company’s 100% owned and
operated deepwater wells, including the Holy Grail well. We remain
very well positioned to take advantage of potential acquisitions
that become available and poised to continue delivering on our
strategic vision. We have a successful track record of accretive
growth through both acquisitions and drilling success. We remain
committed to enhancing shareholder value and returning value to our
shareholders through the quarterly dividend announced in November
2023. Our proven strategy focused on Free Cash Flow generation and
operational excellence has proven to be sustainable over the past
40 years, and we are well-positioned to continue to successfully
execute it in the future.”
Production, Prices, and
Revenue: Production for the fourth quarter of 2023
was 34.1 MBoe/d compared with 35.9 Mboe/d for the third quarter of
2023 and 38.6 MBoe/d for the corresponding period in 2022. The
small decrease in production compared to the third quarter of 2023
was primarily driven by natural decline and some unplanned
downtime, which was partially offset by production optimization and
workovers. Fourth quarter 2023 production was comprised of 13.3
MBbl/d of oil (39%), 3.6 MBbl/d of natural gas liquids (“NGLs”)
(10%), and 103.6 million cubic feet per day (“MMcf/d”) of natural
gas (51%).
W&T’s average realized price per Boe before
realized derivative settlements was $41.55 per Boe in the fourth
quarter of 2023, a decrease of 2% from $42.48 per Boe in the third
quarter of 2023 and a decrease of 21% from $52.82 per Boe in the
fourth quarter of 2022. Fourth quarter 2023 crude oil, NGL, and
natural gas prices before realized derivative settlements were
$77.17 per barrel, $20.82 per barrel, and $3.08 per Mcf,
respectively.
Revenues for the fourth quarter of 2023 were
$132.3 million, which was 7% lower than third quarter 2023 revenue
of $142.4 million due to lower production volumes coupled with
slightly lower realized prices. Fourth quarter 2023 revenue was
lower than $189.7 million of revenue in the fourth quarter of 2022
due to significantly lower realized prices and lower production
volumes.
Lease Operating
Expense: Lease operating expense (“LOE”), which
includes base lease operating expenses, insurance premiums,
workovers and facilities maintenance, was $64.6 million in the
fourth quarter of 2023, which was at the midpoint of the previously
provided guidance range. LOE for the fourth quarter of 2023 was 5%
higher compared to $61.8 million in the third quarter of 2023,
primarily due to higher workover and base lease operating expenses
related to a full quarter of the September acquisition, offset by
lower facility expenses, and lower than the $69.0 million for the
corresponding period in 2022. On a component basis for the fourth
quarter of 2023, base LOE and insurance premiums were $52.4
million, workovers were $6.7 million, and facilities maintenance
and other expenses were $5.5 million. On a unit of production
basis, LOE was $20.61 per Boe in the fourth quarter of 2023. This
compares to $18.72 per Boe for the third quarter of 2023 and $19.42
per Boe for the fourth quarter of 2022.
Gathering, Transportation Costs, and
Production Taxes: Gathering, transportation costs and
production taxes totaled $6.6 million ($2.11 per Boe) in the fourth
quarter of 2023, compared to $6.7 million ($2.03 per Boe) in the
third quarter of 2023 and $8.5 million ($2.39 per Boe) in the
fourth quarter of 2022. Gathering, transportation costs and
production taxes decreased by $1.9 million year-over-year due to
decreases in realized pricing and production volumes.
Depreciation, Depletion, Amortization
and Accretion (“DD&A”): DD&A, including
accretion expense related to asset retirement obligations (“ARO”),
was $13.08 per Boe in the fourth quarter of 2023. This compares to
$11.09 per Boe and $9.64 per Boe for the third quarter of 2023 and
the fourth quarter of 2022, respectively.
General & Administrative Expenses
(“G&A”): G&A was $18.3 million for the fourth
quarter of 2023, which decreased from $20.0 million in the third
quarter of 2023 primarily due to lower salary and benefits costs
and lower legal expenses. G&A decreased by $3.7 million
year-over-year from $22.0 million in the fourth quarter of 2022
likewise due primarily to lower salary and benefits costs and lower
legal expenses. On a unit of production basis, G&A was $5.82
per Boe in the fourth quarter of 2023 compared to $6.05 per Boe in
the third quarter of 2023 and $6.18 per Boe in the corresponding
period of 2022. G&A in the fourth quarter of 2023 included $3.1
million of non-cash compensation expense compared with $3.3 million
in the third quarter of 2023 and $2.7 million in the fourth quarter
of 2022.
Derivative (Gain) Loss: In
the fourth quarter of 2023, W&T recorded a net gain of $13.2
million related to commodity derivative contracts comprised of a
$14.8 million unrealized gain related to the increase in fair value
of open contracts, offset by $1.6 million of realized losses. The
Company recognized a net gain of $1.5 million in the third quarter
of 2023 and a net gain of $24.4 million in the fourth quarter of
2022 related to commodity derivative activities.
As of December 31, 2023, W&T has 65.9 MMcf/d
hedged for the first quarter of 2024 for natural gas and no
existing hedges for oil. A significant portion of W&T’s natural
gas hedges, in the form of sold swaps and purchased calls and puts,
were entered into in conjunction with the non-recourse Mobile Bay
term loan (the “Term Loan”) entered into by borrowers owned by the
Company’s wholly-owned subsidiary Aquasition Energy LLC, with the
terms of such hedges corresponding to the maturity of such Term
Loan.
A summary of the Company’s outstanding
derivative positions is provided in the investor presentation
posted on W&T’s website.
Interest Expense: Net
interest expense in the fourth quarter of 2023 was
$9.7 million compared to $9.9 million in the third quarter of
2023 and $14.5 million in the fourth quarter of 2022. The large
decrease in interest expense in the fourth quarter of 2023 compared
with the fourth quarter of 2022 was due to the full redemption of
the 9.75% Senior Second Lien Notes which occurred in February 2023,
lower interest expense on the lower outstanding principal balance
of the Term Loan and increased interest income. These decreases
were partially offset by interest expense incurred on the 11.75%
Senior Second Lien Notes issued in late January
2023.
Other (Income) Expense, net:
During 2021 and 2022, as a result of the declaration of bankruptcy
by a third party that is the indirect successor in title to certain
offshore interests that were previously divested by the Company,
W&T recorded a contingent loss accrual related to anticipated
ARO. During the fourth quarter of 2023, the Company reassessed the
existing ARO, recording an additional $4.1 million.
Income Tax: W&T
recognized income tax expense of $1.9 million in the fourth quarter
of 2023. This compares to the recognition of income tax expense of
$4.8 million and $6.9 million for the quarters ended September 30,
2023 and December 31, 2022, respectively.
Balance Sheet and
Liquidity: As of December 31, 2023, W&T had
available liquidity of $223.3 million comprised of $173.3 million
in cash and cash equivalents and $50.0 million of borrowing
availability under W&T’s first priority secured revolving
facility provided by Calculus Lending LLC (“Calculus”). At
year-end, the Company had total debt of $390.6 million and Net Debt
of $217.3 million. Of the Company’s total debt of $390.6 million,
only $279.5 million is recourse to W&T. The remaining $111.1
million is held at W&T’s subsidiary, Aquasition Energy LLC, and
is non-recourse to W&T. As of December 31, 2023, Net Debt to
TTM Adjusted EBITDA was 1.2x.
Capital Expenditures: Capital
expenditures (excluding acquisitions and changes in working capital
associated with investing activities) in the fourth quarter of 2023
were $10.3 million, and asset retirement costs totaled $9.1
million. For the full year 2023, capital expenditures (excluding
acquisitions and changes in working capital associated with
investing activities) totaled $41.3 million, which was below the
lower end of W&T’s updated 2023 capital expenditure guidance of
$50 million to $70 million. Plugging and abandonment costs for full
year 2023 were $34 million, which were within the Company’s latest
guidance for 2023 of $25 million to $35 million.
Accretive Acquisitions of Producing
Properties in the GOM
In January 2024, W&T was the successful
bidder for six fields in the Gulf of Mexico, including Eugene
Island 064, Main Pass 061, Mobile 904, Mobile 916, South Pass 049
and West Delta 073, all of which include a 100% working interest
and an average 82% net revenue interest. They are located in water
depths ranging between approximately 15 and 400 feet. Their
proximity to W&T’s areas of existing operations provide the
ability for W&T to capture synergies. The final purchase price
for the assets was $72.0 million, excluding certain closing costs,
which was funded from the Company’s cash on hand. Key highlights of
the transaction are as follows:
-
Adds significant proved reserves of 18.7 MMBoe1 (62% liquids) with
a present value discounted at 10% (“PV-10”) value of $250.4 million
based on an independent engineering report prepared by Netherland
Sewell and Associates (“NSAI”);
-
Based on the cash consideration paid of $72 million, this equates
to a price of $3.85 per Boe of proved reserves;
-
As it has done after prior acquisitions, W&T is assessing,
inspecting and optimizing the newly acquired fields, which requires
shutting in some of the fields in the near term;
-
Field logistics are being examined to see if more cost-effective
tie-ins and throughput can be done with existing W&T facilities
adjacent to the newly acquired fields; and
-
The Company believes that it will increase production on these
properties through workovers, recompletions and facility
upgrades.
In September 2023, the Company announced that it
had completed the acquisition of working interests in eight shallow
water oil and gas producing assets in the central and eastern shelf
region of the GOM from an undisclosed private seller. The assets
were acquired for a gross consideration of $32.0 million, and after
normal and customary post-effective date adjustments (including net
operating cash flow attributable to the properties from the
effective date of June 1, 2023 to the closing date), cash
consideration of $27.4 million was paid to the sellers. W&T
used its cash on hand to pay the net purchase price. This
acquisition has high average working interest of approximately 72%
and provides additional producing properties located within
W&T’s existing area of operations in water depths ranging from
25 to 265 feet.
____________________1 Reserves as of January 1,
2024 using year-end 2023 SEC pricing.
Full Year-End 2023 Financial
Review
W&T reported net income for the full year
2023 of $15.6 million, or $0.11 per diluted share, and Adjusted Net
Loss of $21.7 million, or ($0.15) per diluted share. For the full
year 2022, the Company reported net income of $231.1 million, or
$1.59 per diluted share, and Adjusted Net Income of $284.8 million,
or $1.96 per diluted share. W&T generated Adjusted EBITDA of
$183.2 million for the full year 2023 compared to $563.7 million in
2022. The year-over-year decrease was primarily driven by lower
commodity prices and decreased oil production. Revenues totaled
$532.7 million for 2023 compared with $921.0 million in 2022. Net
Cash provided by operating activities for the twelve months ended
December 31, 2023 was $115.3 million compared with $339.5 million
for the same period in 2022. Free Cash Flow totaled $63.3 million
in 2023 compared with $376.4 million in 2022.
Production for 2023 averaged 34.9 MBoe/d for a
total of 12.7 MMBoe, comprised of 5.1 MMBbl of oil, 1.4 MMBbl of
NGLs and 37.6 Bcf of natural gas. Full year 2022 production
averaged 40.1 MBoe/d or 14.6 MMBoe in total and was comprised of
5.6 MMBbl of oil, 1.6 MMBbl of NGLs and 44.8 Bcf of natural
gas.
For the full year 2023, W&T’s average
realized sales price per barrel of crude oil was $75.52, $22.93 per
barrel of NGLs, and $2.93 per Mcf of natural gas. The equivalent
sales price for 2023 was $41.16 per Boe, which was 33% lower than
the equivalent price of $61.89 per Boe realized in 2022. For 2022,
the Company’s realized crude oil sales price was $93.59 per barrel,
NGL sales price was $36.66 per barrel, and natural gas price was
$7.23 per Mcf.
For the full year 2023, LOE was $257.7 million
compared to $224.4 million in 2022. The increase in LOE in 2023
reflects increased workover and facility investments at Mobile Bay,
the impact of the acquisition of additional properties in September
2023, and inflationary pressures.
Gathering, transportation, and production taxes
totaled $26.3 million in 2023, a decrease from the $35.1 million in
2022. Lower realized prices for natural gas and NGLs drove
severance tax expense down year-over-year.
For the full year 2023, G&A was $75.5
million, which was a minor increase over the $73.7 million reported
in 2022. The increase year-over-year is primarily due to increased
salary and benefits costs that were somewhat offset by lower legal
expenses. On a per unit basis, G&A per Boe was $5.93 in 2023,
up from $5.04 per Boe in 2022. G&A increased on a per Boe basis
primarily due to lower production.
OPERATIONS UPDATE
Well Recompletions and
Workovers
During the fourth quarter of 2023, the Company
performed four workovers and three recompletions that positively
impacted production for the quarter. W&T plans to continue
performing these low cost, short payout operations that impact both
production and revenue.
Year-End 2023 Proved
Reserves
The Company’s year-end 2023 SEC proved reserves
were 123.0 MMBoe, compared with 165.3 MMBoe at year-end 2022. The
W&T year-end 2023 proved reserves do not include the 18.7 MMBoe
of proved reserves acquired in early January 2024 for $72 million.
In 2023, W&T recorded positive performance revisions of 4.0
MMBoe, and acquisitions of reserves of 2.6 MMBoe, which were more
than offset by 36.2 MMBoe of negative price revisions and by 12.7
MMBoe of production for the year. During 2023, W&T continued to
focus on reducing Net Debt and identifying and executing attractive
acquisitions. Successful workovers, operational excellence and
acquisitions allowed W&T to replace 52% of production with new
reserves.
The SEC twelve-month first day of the month
average spot prices used in the preparation of the report for
year-end 2023 were $78.21 per barrel of oil and $2.64 per MMBtu of
natural gas. Comparable prices used for the prior year report were
$94.14 per barrel of oil and $6.36 per MMBtu of natural gas. The
PV-10 of W&T’s proved reserves at year-end 2023 declined to
$1.1 billion from $3.1 billion at year-end 2022, driven primarily
by lower pricing.
Approximately 41% of year-end 2023 proved
reserves were liquids (30% crude oil and 11% NGLs) and 59% natural
gas. The reserves were classified as 67% proved developed
producing, 17% proved developed non-producing, and 16% proved
undeveloped. W&T’s reserve life ratio at year-end 2023, based
on year-end 2023 proved reserves and 2023 production, was 9.7
years.
Summary
Reconciliation of Proved Reserves |
|
|
|
|
Oil |
NGL |
Natural Gas |
Equivalents |
PV-101 |
|
MMBbl |
MMBbl |
Bcf |
MMBoe |
$MM |
Balance, December 31, 2022 |
40.6 |
|
18.9 |
|
634.6 |
|
165.3 |
|
$3,128.6 |
Revisions of previous estimates |
3.1 |
|
0.5 |
|
2.4 |
|
4.0 |
|
|
Revisions due to SEC price change |
(3.1) |
|
(4.6) |
|
(171.2) |
|
(36.2) |
|
|
Extensions & discoveries |
-- |
|
-- |
|
-- |
|
-- |
|
|
Purchases of minerals in place |
1.4 |
|
0.3 |
|
5.9 |
|
2.6 |
|
|
Sales of minerals in place |
-- |
|
-- |
|
-- |
|
-- |
|
|
Production |
(5.1) |
|
(1.4) |
|
(37.6) |
|
(12.7) |
|
|
Balance, December 31, 2023 |
37.0 |
|
13.7 |
|
434.0 |
|
123.0 |
|
$1,080.9 |
|
(1) PV-10 for this presentation excludes any provision for asset
retirement obligations or income taxes. |
|
In accordance with guidelines established by the
SEC, estimated proved reserves as of December 31, 2023 were
determined to be economically producible under existing economic
conditions, which requires the use of the 12-month average of the
first-day-of-the-month price for the year ended December 31, 2023.
The WTI spot price and the Henry Hub spot price were utilized as
the reference prices and after adjusting for quality,
transportation, fees, energy content, and regional price
differentials, the average realized prices were $74.79 per barrel
for oil, $24.08 per barrel for NGLs, and $2.74 per Mcf for natural
gas. In determining the estimated realized price for NGLs, a ratio
was computed for each field of the NGLs realized price compared to
the crude oil realized price. This ratio was then applied to the
crude price using SEC guidance. Such prices were held constant
throughout the estimated lives of the reserves. Future estimated
production and development costs are based on year-end costs with
no escalations.
The standardized measure of future net cash
flows was $683.2 million at December 31, 2023, which is calculated
as the PV-10 of $1,080.9 million less discounted cash outflows of
$246.5 million associated with asset retirement obligations and
$151.0 million associated with income taxes. At December 31, 2022,
the standardized measure was $2,263.0 million, which is calculated
as the PV-10 of $3,128.6 million less discounted cash outflows of
$271.5 million associated with asset retirement obligations and
$594.1 million associated with income taxes.
Pro-forma Impact of Cox
Acquisition
As noted above, the proved reserves added from
the acquisition of six fields from Cox in January 2024 were not
included in W&T’s year-end 2023 proved reserves. Below is the
pro-forma impact of adding those reserves as of December 31, 2023,
which were calculated by NSAI using the same pricing assumptions as
W&T’s year-end 2023 reserves:
|
|
|
|
|
|
|
Oil |
NGL |
Natural Gas |
Equivalents |
PV-101 |
|
MMBbl |
MMBbl |
Bcf |
MMBoe |
$MM |
Balance, December 31, 2023 |
37.0 |
13.7 |
434.0 |
123.0 |
$1,080.9 |
Proved reserves from Cox acquisition |
11.4 |
0.2 |
42.4 |
18.7 |
$250.4 |
Pro forma reserve balance, December 31, 2023 including Cox
acquisition |
48.4 |
13.9 |
476.4 |
141.7 |
$1,331.3 |
|
Cash Dividend Policy
In the fourth quarter of 2023, the Board of
Directors approved a quarterly cash dividend policy with the
initial dividend of $0.01 per common share payable on December 22,
2023 to stockholders of record at the close of business on November
28, 2023. On March 5, 2024 the Board declared its first quarter
dividend of $0.01 per share which will be payable on March 25, 2024
to stockholders of record on March 18, 2024.
First Quarter and Full Year 2024
Production and Expense Guidance
Looking ahead to 2024, Tracy Krohn commented,
“In the first quarter of 2024, we completed an accretive
acquisition of six GOM fields as a result of being the high bidder
in a bankruptcy proceeding. We are actively assessing the
capabilities of these fields, inspecting their needs and current
condition and plan to optimize production with capital-efficient,
low-cost workovers, recompletions and facility upgrades during
2024. This will take some time and effort by our operations
personnel and will result in us shutting in some of the fields in
the near term. With that said, our highly successful track record
of integrating acquisitions while increasing production and value
gives me the confidence that we will be able to accomplish this
with the recent acquisitions. Taking into consideration the
integration of the new assets and associated ramp-up of production,
we believe that we will be able to show meaningful growth in
production by year-end 2024. In addition, given our recent
acquisitions and the current acquisition opportunities in the Gulf
of Mexico, we have decided to defer the drilling of our Holy Grail
well until 2025, which will reduce our drilling and capital
investment plans for 2024 to between $35 million and $45 million.
We are focused on operational excellence, integrating our new
assets and building cash in 2024 which will allow us to act quickly
should we see additional accretive acquisition opportunities arise.
We have built W&T with a proven acquisition strategy and over
the past seven months we have closed on two producing property
acquisitions that added over 20 MMBoe of proved reserves at a
purchase price of approximately $4.75 per Boe, which we believe
provides significant upside potential. We seek to continue to add
value for our shareholders through organic growth and acquisitions
to continue to generate significant Free Cash Flow.”
The guidance for the first quarter and full year
2024 in the table below represents the Company’s current
expectations. Please refer to the section entitled “Forward-Looking
and Cautionary Statements” below for risk factors that could impact
guidance.
Production |
First Quarter 2024 |
Full Year 2024 |
Oil (MBbl) |
1,250 - 1,400 |
5,100 – 5,800 |
NGLs (MBbl) |
285 – 315 |
1,150 – 1,375 |
Natural gas (MMcf) |
8,500 – 9,500 |
37,000 – 44,500 |
Total equivalents (MBoe) |
2,952 – 3,298 |
12,417 – 14,592 |
Average daily equivalents (MBoe/d) |
32.4 – 36.2 |
33.9 – 39.9 |
Expenses |
First Quarter 2024 |
Full Year 2024 |
Lease operating expense ($MM) |
77.5 – 86.0 |
295.0 – 332.0 |
Gathering, transportation & production taxes ($MM) |
7.9 – 8.8 |
34.5 – 39.0 |
|
|
|
General & administrative – cash ($MM) |
15.0 – 17.0 |
59.0 – 66.5 |
General & administrative – non-cash ($MM) |
2.6 – 3.0 |
12.5 – 14.0 |
|
|
|
DD&A ($ per Boe) |
|
11.4 – 12.9 |
|
|
|
W&T expects substantially all taxes in 2024
to be deferred.
2024 Capital Investment
Program
W&T’s capital expenditure budget for 2024 is
expected to be in the range of $35 million to $45 million, which
excludes potential acquisition opportunities. Included in this
range are planned expenditures related to integrations as well as
ongoing costs related to the acquisitions for facilities,
leasehold, seismic, and recompletions.
Plugging and abandonment expenditures are
expected to be in the range of $30 million to $40 million. The
Company spent approximately $34 million on these costs in 2023.
Conference Call
Information: W&T will hold a conference call to
discuss its financial and operational results on Wednesday, March
6, 2024 at 9:00 a.m. Central Time (10:00 Eastern Time). Interested
parties may dial 1-844-739-3797. International parties may dial
1-412-317-5713. Participants should request to connect to the
“W&T Offshore Conference Call”. This call will also be webcast
and available on W&T’s website at www.wtoffshore.com under
“Investors”. An audio replay will be available on the Company’s
website following the call.
About W&T Offshore
W&T Offshore, Inc. is an independent oil and
natural gas producer with operations offshore in the Gulf of Mexico
and has grown through acquisitions, exploration and development. As
of December 31, 2023, the Company had working interests in 53
fields in federal and state waters (which include 44 fields in
federal waters and nine in state waters). The Company has under
lease approximately 597,100 gross acres (440,000 net acres)
spanning across the outer continental shelf off the coasts of
Louisiana, Texas, Mississippi and Alabama, with approximately
435,600 gross acres on the conventional shelf, approximately
153,500 gross acres in the deepwater and 8,000 gross acres in
Alabama state waters. A majority of the Company’s daily production
is derived from wells it operates. For more information on W&T,
please visit the Company’s website at www.wtoffshore.com.
Forward-Looking and Cautionary
Statements
This press release contains forward-looking
statements within the meaning of Section 27A of the Securities Act
of 1933, as amended, and Section 21E of the Securities Exchange Act
of 1934, as amended. All statements other than statements of
historical facts included in this release regarding the Company’s
financial position, operating and financial performance, business
strategy, plans and objectives of management for future operations,
projected costs, industry conditions, potential acquisitions, the
impact of and integration of acquired assets, and indebtedness are
forward-looking statements. When used in this release,
forward-looking statements are generally accompanied by terms or
phrases such as “estimate,” “project,” “predict,” “believe,”
“expect,” “continue,” “anticipate,” “target,” “could,” “plan,”
“intend,” “seek,” “goal,” “will,” “should,” “may” or other words
and similar expressions that convey the uncertainty of future
events or outcomes, although not all forward-looking statements
contain such identifying words. Items contemplating or making
assumptions about actual or potential future production and sales,
prices, market size, and trends or operating results also
constitute such forward-looking statements.
These forward-looking statements are based on
the Company’s current expectations and assumptions about future
events and speak only as of the date of this release. While
management considers these expectations and assumptions to be
reasonable, they are inherently subject to significant business,
economic, competitive, regulatory and other risks, contingencies
and uncertainties, most of which are difficult to predict and many
of which are beyond the Company’s control. Accordingly, you are
cautioned not to place undue reliance on these forward-looking
statements, as results actually achieved may differ materially from
expected results described in these statements. The Company does
not undertake, and specifically disclaims, any obligation to update
any forward-looking statements to reflect events or circumstances
occurring after the date of such statements, unless required by
law.
Forward-looking statements are subject to risks
and uncertainties that could cause actual results to differ
materially including, among other things, the regulatory
environment, including availability or timing of, and conditions
imposed on, obtaining and/or maintaining permits and approvals,
including those necessary for drilling and/or development projects;
the impact of current, pending and/or future laws and regulations,
and of legislative and regulatory changes and other government
activities, including those related to permitting, drilling,
completion, well stimulation, operation, maintenance or abandonment
of wells or facilities, managing energy, water, land, greenhouse
gases or other emissions, protection of health, safety and the
environment, or transportation, marketing and sale of the Company’s
products; inflation levels; global economic trends, geopolitical
risks and general economic and industry conditions, such as the
global supply chain disruptions and the government interventions
into the financial markets and economy in response to inflation
levels and world health events; volatility of oil, NGL and natural
gas prices; the global energy future, including the factors and
trends that are expected to shape it, such as concerns about
climate change and other air quality issues, the transition to a
low-emission economy and the expected role of different energy
sources; supply of and demand for oil, natural gas and NGLs,
including due to the actions of foreign producers, importantly
including OPEC and other major oil producing companies (“OPEC
Plus”) and change in OPEC Plus’s production levels; disruptions to,
capacity constraints in, or other limitations on the pipeline
systems that deliver the Company’s oil and natural gas and other
processing and transportation considerations; inability to generate
sufficient cash flow from operations or to obtain adequate
financing to fund capital expenditures, meet the Company’s working
capital requirements or fund planned investments; price
fluctuations and availability of natural gas and electricity; the
Company’s ability to use derivative instruments to manage commodity
price risk; the Company’s ability to meet the Company’s planned
drilling schedule, including due to the Company’s ability to obtain
permits on a timely basis or at all, and to successfully drill
wells that produce oil and natural gas in commercially viable
quantities; uncertainties associated with estimating proved
reserves and related future cash flows; the Company’s ability to
replace the Company’s reserves through exploration and development
activities; drilling and production results, lower–than–expected
production, reserves or resources from development projects or
higher–than–expected decline rates; the Company’s ability to obtain
timely and available drilling and completion equipment and crew
availability and access to necessary resources for drilling,
completing and operating wells; changes in tax laws; effects of
competition; uncertainties and liabilities associated with acquired
and divested assets; the Company’s ability to make acquisitions and
successfully integrate any acquired businesses; asset impairments
from commodity price declines; large or multiple customer defaults
on contractual obligations, including defaults resulting from
actual or potential insolvencies; geographical concentration of the
Company’s operations; the creditworthiness and performance of the
Company’s counterparties with respect to its hedges; impact of
derivatives legislation affecting the Company’s ability to hedge;
failure of risk management and ineffectiveness of internal
controls; catastrophic events, including tropical storms,
hurricanes, earthquakes, pandemics and other world health events;
environmental risks and liabilities under U.S. federal, state,
tribal and local laws and regulations (including remedial actions);
potential liability resulting from pending or future litigation;
the Company’s ability to recruit and/or retain key members of the
Company’s senior management and key technical employees;
information technology failures or cyberattacks; and governmental
actions and political conditions, as well as the actions by other
third parties that are beyond the Company’s control, and other
factors discussed in W&T Offshore’s most recent Annual Report
on Form 10-K and subsequent Quarterly Reports on Form 10-Q found at
www.sec.gov or at the Company’s website at www.wtoffshore.com under
the Investor Relations section.
W&T OFFSHORE, INC. |
Consolidated Statements of Operations |
(In thousands, except per share data) |
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Year Ended |
|
|
|
December 31, |
|
September 30, |
|
December 31, |
|
December 31, |
|
|
|
2023 |
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil |
|
$ |
94,076 |
|
|
$ |
100,331 |
|
|
$ |
111,748 |
|
|
$ |
381,389 |
|
|
$ |
524,274 |
|
NGLs |
|
|
6,851 |
|
|
|
7,415 |
|
|
|
9,534 |
|
|
|
32,446 |
|
|
|
56,964 |
|
Natural gas |
|
|
29,401 |
|
|
|
32,515 |
|
|
|
66,379 |
|
|
|
110,158 |
|
|
|
323,831 |
|
Other |
|
|
2,012 |
|
|
|
2,150 |
|
|
|
2,039 |
|
|
|
8,663 |
|
|
|
15,928 |
|
Total revenues |
|
|
132,340 |
|
|
|
142,411 |
|
|
|
189,700 |
|
|
|
532,656 |
|
|
|
920,997 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lease operating expenses |
|
|
64,643 |
|
|
|
61,826 |
|
|
|
69,017 |
|
|
|
257,676 |
|
|
|
224,414 |
|
Gathering, transportation and production taxes |
|
|
6,620 |
|
|
|
6,692 |
|
|
|
8,481 |
|
|
|
26,250 |
|
|
|
35,128 |
|
Depreciation, depletion, and amortization |
|
|
33,658 |
|
|
|
30,218 |
|
|
|
27,274 |
|
|
|
114,677 |
|
|
|
107,122 |
|
Asset retirement obligations accretion |
|
|
7,377 |
|
|
|
6,414 |
|
|
|
6,972 |
|
|
|
29,018 |
|
|
|
26,508 |
|
General and administrative expenses |
|
|
18,251 |
|
|
|
19,978 |
|
|
|
21,957 |
|
|
|
75,541 |
|
|
|
73,747 |
|
Total operating expenses |
|
|
130,549 |
|
|
|
125,128 |
|
|
|
133,701 |
|
|
|
503,162 |
|
|
|
466,919 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income |
|
|
1,791 |
|
|
|
17,283 |
|
|
|
55,999 |
|
|
|
29,494 |
|
|
|
454,078 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense, net |
|
|
9,729 |
|
|
|
9,925 |
|
|
|
14,526 |
|
|
|
44,689 |
|
|
|
69,441 |
|
Derivative (gain) loss, net |
|
|
(13,199 |
) |
|
|
(1,491 |
) |
|
|
(24,359 |
) |
|
|
(54,759 |
) |
|
|
85,533 |
|
Other expense, net |
|
|
3,772 |
|
|
|
1,927 |
|
|
|
15,524 |
|
|
|
5,621 |
|
|
|
14,295 |
|
Income before income taxes |
|
|
1,489 |
|
|
|
6,922 |
|
|
|
50,308 |
|
|
|
33,943 |
|
|
|
284,809 |
|
Income tax expense |
|
|
1,932 |
|
|
|
4,777 |
|
|
|
6,859 |
|
|
|
18,345 |
|
|
|
53,660 |
|
Net (loss) income |
|
$ |
(443 |
) |
|
$ |
2,145 |
|
|
$ |
43,449 |
|
|
$ |
15,598 |
|
|
$ |
231,149 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
— |
|
|
$ |
0.01 |
|
|
$ |
0.30 |
|
|
$ |
0.11 |
|
|
$ |
1.61 |
|
Diluted |
|
|
— |
|
|
|
0.01 |
|
|
|
0.30 |
|
|
|
0.11 |
|
|
|
1.59 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares outstanding |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
146,578 |
|
|
|
146,483 |
|
|
|
143,490 |
|
|
|
146,483 |
|
|
|
143,143 |
|
Diluted |
|
|
146,578 |
|
|
|
151,459 |
|
|
|
146,260 |
|
|
|
148,302 |
|
|
|
145,090 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
W&T OFFSHORE, INC. |
|
Condensed Operating Data |
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Year Ended |
|
|
|
December 31, |
|
September 30, |
|
December 31, |
|
December 31, |
|
|
|
2023 |
|
2023 |
|
2022 |
|
2023 |
|
2022 |
|
Net sales volumes: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil (MBbls) |
|
|
1,219 |
|
|
1,227 |
|
|
1,375 |
|
|
5,050 |
|
|
5,602 |
|
NGLs (MBbls) |
|
|
329 |
|
|
348 |
|
|
371 |
|
|
1,415 |
|
|
1,554 |
|
Natural gas (MMcf) |
|
|
9,533 |
|
|
10,359 |
|
|
10,843 |
|
|
37,591 |
|
|
44,808 |
|
Total oil and natural gas (MBoe) (1) |
|
|
3,136 |
|
|
3,302 |
|
|
3,553 |
|
|
12,730 |
|
|
14,624 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average daily equivalent sales (MBoe/d) |
|
|
34.1 |
|
|
35.9 |
|
|
38.6 |
|
|
34.9 |
|
|
40.1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average realized sales prices (before the impact of derivative
settlements): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil ($/Bbl) |
|
$ |
77.17 |
|
$ |
81.77 |
|
$ |
81.27 |
|
$ |
75.52 |
|
$ |
93.59 |
|
NGLs ($/Bbl) |
|
|
20.82 |
|
|
21.31 |
|
|
25.70 |
|
|
22.93 |
|
|
36.66 |
|
Natural gas ($/Mcf) |
|
|
3.08 |
|
|
3.14 |
|
|
6.12 |
|
|
2.93 |
|
|
7.23 |
|
Barrel of oil equivalent ($/Boe) |
|
|
41.55 |
|
|
42.48 |
|
|
52.82 |
|
|
41.16 |
|
|
61.89 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average operating expenses per Boe ($/Boe): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lease operating expenses |
|
$ |
20.61 |
|
$ |
18.72 |
|
$ |
19.42 |
|
$ |
20.24 |
|
$ |
15.35 |
|
Gathering, transportation and production taxes |
|
|
2.11 |
|
|
2.03 |
|
|
2.39 |
|
|
2.06 |
|
|
2.40 |
|
Depreciation, depletion, and amortization |
|
|
10.73 |
|
|
9.15 |
|
|
7.68 |
|
|
9.01 |
|
|
7.33 |
|
Asset retirement obligations accretion |
|
|
2.35 |
|
|
1.94 |
|
|
1.96 |
|
|
2.28 |
|
|
1.81 |
|
General and administrative expenses |
|
|
5.82 |
|
|
6.05 |
|
|
6.18 |
|
|
5.93 |
|
|
5.04 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) MBoe is determined using the ratio of six Mcf of natural gas to
one Bbl of crude oil, condensate or NGLs (totals may not compute
due to rounding). The conversion ratio does not assume price
equivalency and the price on an equivalent basis for oil, NGLs and
natural gas may differ significantly. The realized prices presented
above are volume-weighted for production in the respective
period. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
W&T
OFFSHORE, INC. |
Consolidated
Balance Sheets |
(In
thousands) |
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
December 31, |
|
|
|
2023 |
|
|
2022 |
|
|
Assets |
|
|
|
|
|
|
|
Current
assets: |
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
173,338 |
|
|
$ |
461,357 |
|
|
Restricted cash |
|
|
4,417 |
|
|
|
4,417 |
|
|
Receivables: |
|
|
|
|
|
|
|
Oil and natural gas sales |
|
|
52,080 |
|
|
|
66,146 |
|
|
Joint interest, net |
|
|
15,480 |
|
|
|
14,000 |
|
|
Other |
|
|
2,218 |
|
|
|
— |
|
|
Prepaid expenses and other assets |
|
|
17,447 |
|
|
|
24,343 |
|
|
Total current assets |
|
|
264,980 |
|
|
|
570,263 |
|
|
|
|
|
|
|
|
|
|
Oil and
natural gas properties and other, net |
|
|
749,056 |
|
|
|
735,215 |
|
|
Restricted
deposits for asset retirement obligations |
|
|
22,272 |
|
|
|
21,483 |
|
|
Deferred
income taxes |
|
|
38,774 |
|
|
|
57,280 |
|
|
Other
assets |
|
|
38,923 |
|
|
|
47,549 |
|
|
Total
assets |
|
$ |
1,114,005 |
|
|
$ |
1,431,790 |
|
|
|
|
|
|
|
|
|
|
Liabilities and Shareholders’ Equity |
|
|
|
|
|
|
|
Current
liabilities: |
|
|
|
|
|
|
|
Accounts payable |
|
$ |
78,857 |
|
|
$ |
65,158 |
|
|
Accrued liabilities |
|
|
31,879 |
|
|
|
74,041 |
|
|
Undistributed oil and natural gas proceeds |
|
|
42,134 |
|
|
|
41,934 |
|
|
Advances from joint interest partners |
|
|
2,962 |
|
|
|
3,181 |
|
|
Income tax payable |
|
|
99 |
|
|
|
412 |
|
|
Current portion of asset retirement obligation |
|
|
31,553 |
|
|
|
25,359 |
|
|
Current portion of long-term debt, net |
|
|
29,368 |
|
|
|
582,249 |
|
|
Total current liabilities |
|
|
216,852 |
|
|
|
792,334 |
|
|
|
|
|
|
|
|
|
|
Asset
retirement obligations |
|
|
467,262 |
|
|
|
441,071 |
|
|
Long-term
debt, net |
|
|
361,236 |
|
|
|
111,188 |
|
|
Deferred
income taxes |
|
|
51 |
|
|
|
72 |
|
|
Other
liabilities |
|
|
19,369 |
|
|
|
59,134 |
|
|
Commitments
and contingencies |
|
|
18,043 |
|
|
|
20,357 |
|
|
|
|
|
|
|
|
|
|
Shareholders’ equity: |
|
|
|
|
|
|
|
Preferred stock, $0.00001 par value; 20,000 shares authorized; none
issued at December 31, 2023 and December 31, 2022 |
|
|
— |
|
|
|
— |
|
|
Common stock, $0.00001 par value; 400,000 shares authorized;
149,450 issued and 146,581 outstanding at December 31, 2023;
149,002 issued and 146,133 oustanding at December 31, 2022 |
|
|
1 |
|
|
|
1 |
|
|
Additional paid-in capital |
|
|
586,014 |
|
|
|
576,588 |
|
|
Retained deficit |
|
|
(530,656 |
) |
|
|
(544,788 |
) |
|
Treasury stock, at cost; 2,869 shares |
|
|
(24,167 |
) |
|
|
(24,167 |
) |
|
Total shareholders’ equity |
|
|
31,192 |
|
|
|
7,634 |
|
|
Total
liabilities and shareholders’ equity |
|
$ |
1,114,005 |
|
|
$ |
1,431,790 |
|
|
|
|
|
|
|
|
|
|
W&T OFFSHORE, INC. |
|
Consolidated Statements of Cash Flows |
|
(In thousands) |
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Year Ended |
|
|
|
December 31, |
|
September 30, |
|
December 31, |
|
December 31, |
|
|
|
2023 |
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
|
Operating activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income |
|
$ |
(443 |
) |
|
$ |
2,145 |
|
|
$ |
43,449 |
|
|
$ |
15,598 |
|
|
$ |
231,149 |
|
|
Adjustments to reconcile net (loss) income to net cash provided by
operating activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation, depletion, amortization and accretion |
|
|
41,035 |
|
|
|
36,632 |
|
|
|
34,246 |
|
|
|
143,695 |
|
|
|
133,630 |
|
|
Share-based compensation |
|
|
3,124 |
|
|
|
3,250 |
|
|
|
2,743 |
|
|
|
10,383 |
|
|
|
7,922 |
|
|
Amortization and write off of debt issuance costs |
|
|
1,266 |
|
|
|
1,351 |
|
|
|
1,437 |
|
|
|
6,980 |
|
|
|
7,551 |
|
|
Derivative (gain) loss |
|
|
(13,199 |
) |
|
|
(1,491 |
) |
|
|
(24,359 |
) |
|
|
(54,759 |
) |
|
|
85,533 |
|
|
Derivative cash payments, net |
|
|
(2,809 |
) |
|
|
(1,696 |
) |
|
|
(40,858 |
) |
|
|
(8,932 |
) |
|
|
(41,880 |
) |
|
Derivative cash premium payments |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(46,111 |
) |
|
Deferred income taxes |
|
|
3,838 |
|
|
|
3,067 |
|
|
|
5,013 |
|
|
|
18,485 |
|
|
|
45,184 |
|
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil and natural gas receivables |
|
|
(3,558 |
) |
|
|
(7,180 |
) |
|
|
23,049 |
|
|
|
14,066 |
|
|
|
(11,227 |
) |
|
Joint interest receivables |
|
|
569 |
|
|
|
(2,174 |
) |
|
|
2,815 |
|
|
|
(1,480 |
) |
|
|
(4,255 |
) |
|
Prepaid expenses and other current assets |
|
|
(28,262 |
) |
|
|
(1,442 |
) |
|
|
58,722 |
|
|
|
(2,712 |
) |
|
|
31,906 |
|
|
Accounts payable, accrued liabilities and other |
|
|
45,197 |
|
|
|
8,937 |
|
|
|
(77,600 |
) |
|
|
10,722 |
|
|
|
(12,034 |
) |
|
Cash advances from JV partners |
|
|
(145 |
) |
|
|
(3 |
) |
|
|
163 |
|
|
|
(219 |
) |
|
|
(11,892 |
) |
|
Income taxes |
|
|
(1,897 |
) |
|
|
1,711 |
|
|
|
(1,201 |
) |
|
|
(2,531 |
) |
|
|
279 |
|
|
Asset retirement obligation settlements |
|
|
(9,052 |
) |
|
|
(13,077 |
) |
|
|
(14,940 |
) |
|
|
(33,970 |
) |
|
|
(76,225 |
) |
|
Net cash provided by operating activities |
|
|
35,664 |
|
|
|
30,030 |
|
|
|
12,679 |
|
|
|
115,326 |
|
|
|
339,530 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investing activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment in oil and natural gas properties and equipment |
|
|
(10,319 |
) |
|
|
(7,960 |
) |
|
|
(11,666 |
) |
|
|
(41,278 |
) |
|
|
(41,632 |
) |
|
Changes in operatings assets and liabilities associated with
investing activities |
|
|
(1,820 |
) |
|
|
3,623 |
|
|
|
6,343 |
|
|
|
(535 |
) |
|
|
(1,894 |
) |
|
Acquisition of property interests |
|
|
1,479 |
|
|
|
(28,863 |
) |
|
|
— |
|
|
|
(27,384 |
) |
|
|
(51,474 |
) |
|
Deposit related to acquisition of property interests |
|
|
8,850 |
|
|
|
(8,850 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Purchase of corporate aircraft |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(8,983 |
) |
|
|
— |
|
|
Purchases of furniture, fixtures and other |
|
|
(347 |
) |
|
|
(2,863 |
) |
|
|
(80 |
) |
|
|
(3,428 |
) |
|
|
(80 |
) |
|
Net cash used in investing activities |
|
|
(2,157 |
) |
|
|
(44,913 |
) |
|
|
(5,403 |
) |
|
|
(81,608 |
) |
|
|
(95,080 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financing activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Repayment of 9.75% Senior Second Lien Notes due 2023 |
|
|
— |
|
|
|
— |
|
|
|
(9,122 |
) |
|
|
(552,460 |
) |
|
|
— |
|
|
Repayment of Term Loan |
|
|
(7,412 |
) |
|
|
(7,148 |
) |
|
|
— |
|
|
|
(33,741 |
) |
|
|
(42,959 |
) |
|
Repayment of TVPX Loan |
|
|
(275 |
) |
|
|
(275 |
) |
|
|
— |
|
|
|
(733 |
) |
|
|
— |
|
|
Proceeds from issuance of 11.75% Senior Second Lien Notes due
2026 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
275,000 |
|
|
|
— |
|
|
Debt issuance costs |
|
|
— |
|
|
|
(128 |
) |
|
|
331 |
|
|
|
(7,380 |
) |
|
|
(1,675 |
) |
|
Net proceeds from issuance of common stock |
|
|
— |
|
|
|
— |
|
|
|
16,458 |
|
|
|
— |
|
|
|
16,458 |
|
|
Payment of dividends |
|
|
(1,466 |
) |
|
|
— |
|
|
|
— |
|
|
|
(1,466 |
) |
|
|
— |
|
|
Other |
|
|
(9 |
) |
|
|
(200 |
) |
|
|
(716 |
) |
|
|
(957 |
) |
|
|
(716 |
) |
|
Net cash used in financing activities |
|
|
(9,162 |
) |
|
|
(7,751 |
) |
|
|
6,951 |
|
|
|
(321,737 |
) |
|
|
(28,892 |
) |
|
Change in cash, cash equivalents and restricted cash |
|
|
24,345 |
|
|
|
(22,634 |
) |
|
|
14,227 |
|
|
|
(288,019 |
) |
|
|
215,558 |
|
|
Cash, cash equivalents and restricted cash, beginning of
period |
|
|
153,410 |
|
|
|
176,044 |
|
|
|
451,547 |
|
|
|
465,774 |
|
|
|
250,216 |
|
|
Cash, cash equivalents and restricted cash, end of period |
|
$ |
177,755 |
|
|
$ |
153,410 |
|
|
$ |
465,774 |
|
|
$ |
177,755 |
|
|
$ |
465,774 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
W&T OFFSHORE, INC. AND 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,”
“Free Cash Flow” and “PV-10” or are derivable from a combination of
these measures. Management uses these non-GAAP financial measures
in its analysis of performance. These disclosures may not be viewed
as a substitute for results determined in accordance with GAAP and
are not necessarily comparable to non-GAAP performance measures
which may be reported by other companies. Prior period amounts have
been conformed to the methodology and presentation of the current
period.
We calculate Net Debt as total debt (current and
long-term portions), less cash and cash equivalents. Management
uses Net Debt to evaluate the Company’s financial position,
including its ability to service its debt obligations.
Reconciliation of Net (Loss) Income to Adjusted Net (Loss)
Income |
|
Adjusted Net (Loss) Income adjusts for certain
items that the Company believes affect comparability of operating
results, including items that are generally non-recurring in nature
or whose timing and/or amount cannot be reasonably estimated. These
items include unrealized commodity derivative (gain) loss net of
derivative premiums, allowance for credit losses, write-off of debt
issuance costs, non-recurring IT-transition costs, non-ARO plugging
and abandonment costs, and other which are then tax effected using
the Federal Statutory Rate.
|
|
Three Months Ended |
|
Year Ended |
|
|
|
December 31, |
|
September 30, |
|
December 31, |
|
December 31, |
|
|
|
2023 |
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
|
|
|
|
(in thousands) |
|
|
|
|
(Unaudited) |
|
Net (loss) income |
|
$ |
(443 |
) |
|
$ |
2,145 |
|
|
$ |
43,449 |
|
|
$ |
15,598 |
|
|
$ |
231,149 |
|
|
Unrealized commodity derivative (gain) loss and effect of
derivative premiums, net |
|
|
(14,785 |
) |
|
|
(3,462 |
) |
|
|
(53,132 |
) |
|
|
(58,846 |
) |
|
|
45,475 |
|
|
Allowance for credit losses |
|
|
28 |
|
|
|
6 |
|
|
|
43 |
|
|
|
37 |
|
|
|
(76 |
) |
|
Write-off debt issuance costs |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
2,330 |
|
|
|
— |
|
|
Non-recurring costs related to IT services transition |
|
|
413 |
|
|
|
768 |
|
|
|
1,844 |
|
|
|
3,044 |
|
|
|
8,237 |
|
|
Non-ARO P&A costs |
|
|
4,137 |
|
|
|
2,103 |
|
|
|
15,899 |
|
|
|
6,246 |
|
|
|
18,402 |
|
|
Other |
|
|
(240 |
) |
|
|
187 |
|
|
|
(372 |
) |
|
|
31 |
|
|
|
(4,104 |
) |
|
Tax effect of selected items(1) |
|
|
2,194 |
|
|
|
84 |
|
|
|
7,501 |
|
|
|
9,903 |
|
|
|
(14,266 |
) |
|
Adjusted net (loss) income |
|
$ |
(8,696 |
) |
|
$ |
1,831 |
|
|
$ |
15,232 |
|
|
$ |
(21,657 |
) |
|
$ |
284,817 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted net (loss) income per common share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
(0.06 |
) |
|
$ |
0.01 |
|
|
$ |
0.11 |
|
|
$ |
(0.15 |
) |
|
$ |
1.99 |
|
|
Diluted |
|
$ |
(0.06 |
) |
|
$ |
0.01 |
|
|
$ |
0.10 |
|
|
$ |
(0.15 |
) |
|
$ |
1.96 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
146,578 |
|
|
|
146,483 |
|
|
|
143,490 |
|
|
|
146,483 |
|
|
|
143,143 |
|
|
Diluted |
|
|
146,578 |
|
|
|
151,459 |
|
|
|
146,260 |
|
|
|
146,483 |
|
|
|
145,090 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Selected items were tax effected with the Federal
Statutory Rate of 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 income (loss) plus net interest expense,
income tax expense, depreciation, depletion and amortization, ARO
accretion, excluding the unrealized commodity derivative (gain)
loss net of derivative premiums, allowance for credit losses,
non-cash incentive compensation, non-recurring IT-transition costs,
non-ARO plugging and abandonment costs, and other. Company
management believes this presentation is relevant and useful
because it helps investors understand W&T’s operating
performance and makes it easier to compare its results with those
of other companies that have different financing, capital and tax
structures. Adjusted EBITDA should not be considered in isolation
from or as a substitute for net income, as an indication of
operating performance or cash flows from operating activities or as
a measure of liquidity. Adjusted EBITDA, as W&T calculates it,
may not be comparable to Adjusted EBITDA measures reported by other
companies. In addition, Adjusted EBITDA does not represent funds
available for discretionary use.
The Company defines Free Cash Flow as Adjusted
EBITDA (defined above), less capital expenditures, plugging and
abandonment costs and net interest expense (all on an accrual
basis). For this purpose, the Company’s definition of capital
expenditures includes costs incurred related to oil and natural gas
properties (such as drilling and infrastructure costs and the lease
maintenance costs) and equipment, furniture and fixtures, but
excludes acquisition costs of oil and gas properties from third
parties that are not included in the Company’s capital expenditures
guidance provided to investors. Company management believes that
Free Cash Flow is an important financial performance measure for
use in evaluating the performance and efficiency of its current
operating activities after the impact of accrued capital
expenditures, plugging and abandonment costs and net interest
expense and without being impacted by items such as changes
associated with working capital, which can vary substantially from
one period to another. There is no commonly accepted definition of
Free Cash Flow within the industry. Accordingly, Free Cash Flow, as
defined and calculated by the Company, may not be comparable to
Free Cash Flow or other similarly named non-GAAP measures reported
by other companies. While the Company includes net interest expense
in the calculation of Free Cash Flow, other mandatory debt service
requirements of future payments of principal at maturity (if such
debt is not refinanced) are excluded from the calculation of Free
Cash Flow. These and other non-discretionary expenditures that are
not deducted from Free Cash Flow would reduce cash available for
other uses.
|
|
Three Months Ended |
|
Year Ended |
|
|
|
December 31, |
|
September 31, |
|
December 31, |
|
December 31, |
|
|
|
2023 |
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
|
|
|
(in thousands) |
|
|
|
(Unaudited) |
|
Net (loss) income |
|
$ |
(443 |
) |
|
$ |
2,145 |
|
|
$ |
43,449 |
|
|
$ |
15,598 |
|
|
$ |
231,149 |
|
|
Interest expense, net |
|
|
9,729 |
|
|
|
9,924 |
|
|
|
14,526 |
|
|
|
44,689 |
|
|
|
69,441 |
|
|
Income tax expense |
|
|
1,932 |
|
|
|
4,777 |
|
|
|
6,859 |
|
|
|
18,345 |
|
|
|
53,660 |
|
|
Depreciation, depletion and amortization |
|
|
33,658 |
|
|
|
30,218 |
|
|
|
27,274 |
|
|
|
114,677 |
|
|
|
107,122 |
|
|
Asset retirement obligations accretion |
|
|
7,377 |
|
|
|
6,414 |
|
|
|
6,972 |
|
|
|
29,018 |
|
|
|
26,508 |
|
|
Unrealized commodity derivative (gain) loss and effect of
derivative premiums, net |
|
|
(14,785 |
) |
|
|
(3,462 |
) |
|
|
(53,132 |
) |
|
|
(58,846 |
) |
|
|
45,475 |
|
|
Allowance for credit losses |
|
|
28 |
|
|
|
6 |
|
|
|
43 |
|
|
|
37 |
|
|
|
(76 |
) |
|
Non-cash incentive compensation |
|
|
3,124 |
|
|
|
3,250 |
|
|
|
2,743 |
|
|
|
10,383 |
|
|
|
7,922 |
|
|
Non-recurring costs related to IT services transition |
|
|
413 |
|
|
|
768 |
|
|
|
1,844 |
|
|
|
3,044 |
|
|
|
8,237 |
|
|
Non-ARO P&A costs |
|
|
4,137 |
|
|
|
2,103 |
|
|
|
15,899 |
|
|
|
6,246 |
|
|
|
18,402 |
|
|
Other |
|
|
(240 |
) |
|
|
205 |
|
|
|
(372 |
) |
|
|
31 |
|
|
|
(4,104 |
) |
|
Adjusted EBITDA |
|
$ |
44,930 |
|
|
$ |
56,348 |
|
|
$ |
66,105 |
|
|
$ |
183,222 |
|
|
$ |
563,736 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment in oil and natural gas properties and equipment |
|
|
(10,319 |
) |
|
|
(7,960 |
) |
|
|
(11,666 |
) |
|
|
(41,278 |
) |
|
|
(41,632 |
) |
|
Asset retirement obligation settlements |
|
|
(9,052 |
) |
|
|
(13,077 |
) |
|
|
(14,940 |
) |
|
|
(33,970 |
) |
|
|
(76,225 |
) |
|
Interest expense, net |
|
|
(9,729 |
) |
|
|
(9,924 |
) |
|
|
(14,526 |
) |
|
|
(44,689 |
) |
|
|
(69,441 |
) |
|
Free Cash Flow |
|
$ |
15,830 |
|
|
$ |
25,387 |
|
|
$ |
24,973 |
|
|
$ |
63,285 |
|
|
$ |
376,438 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The following tables present (i) a
reconciliation of cash flow from operating activities, a GAAP
measure, to Free Cash Flow, as defined by the Company and (ii) a
reconciliation of the Company’s net income (loss), a GAAP measure,
to Adjusted EBITDA and Free Cash Flow, as such terms are defined by
the Company.
|
|
Three Months Ended |
|
Year Ended |
|
|
|
|
December 31, |
|
September 30, |
|
|
December 31, |
|
December 31, |
|
|
|
|
2023 |
|
|
2023 |
|
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
|
|
|
(in thousands) |
|
|
|
(Unaudited) |
|
Net cash provided by operating activities |
|
$ |
35,664 |
|
|
$ |
30,030 |
|
|
$ |
12,679 |
|
|
$ |
115,326 |
|
|
$ |
339,530 |
|
|
Allowance for credit losses |
|
|
28 |
|
|
|
6 |
|
|
|
43 |
|
|
|
37 |
|
|
|
(76 |
) |
|
Amortization of debt items and other items |
|
|
(1,266 |
) |
|
|
(1,351 |
) |
|
|
(1,437 |
) |
|
|
(6,980 |
) |
|
|
(7,551 |
) |
|
Non-recurring costs related to IT services transition |
|
|
413 |
|
|
|
768 |
|
|
|
1,844 |
|
|
|
3,044 |
|
|
|
8,237 |
|
|
Current tax (benefit) expense(1) |
|
|
(1,906 |
) |
|
|
1,710 |
|
|
|
1,846 |
|
|
|
(140 |
) |
|
|
8,476 |
|
|
Changes in derivatives receivable (payable)(1) |
|
|
1,223 |
|
|
|
(275 |
) |
|
|
12,085 |
|
|
|
4,845 |
|
|
|
47,933 |
|
|
Non-ARO P&A costs |
|
|
4,137 |
|
|
|
2,103 |
|
|
|
15,899 |
|
|
|
6,246 |
|
|
|
18,402 |
|
|
Changes in operating assets and liabilities, excluding asset
retirement obligation settlements |
|
|
(11,904 |
) |
|
|
151 |
|
|
|
(5,948 |
) |
|
|
(17,846 |
) |
|
|
7,223 |
|
|
Investment in oil and natural gas properties, equipment and
other |
|
|
(10,319 |
) |
|
|
(7,960 |
) |
|
|
(11,666 |
) |
|
|
(41,278 |
) |
|
|
(41,632 |
) |
|
Allowance for credit losses |
|
|
(240 |
) |
|
|
205 |
|
|
|
(372 |
) |
|
|
31 |
|
|
|
(4,104 |
) |
|
Free Cash Flow |
|
$ |
15,830 |
|
|
$ |
25,387 |
|
|
$ |
24,973 |
|
|
$ |
63,285 |
|
|
$ |
376,438 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) A reconciliation of the adjustment used to calculate Free
Cash Flow to the Condensed Consolidated Financial Statements is
included
below: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current tax benefit: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense |
|
$ |
1,932 |
|
|
$ |
4,777 |
|
|
$ |
6,859 |
|
|
$ |
18,345 |
|
|
$ |
53,660 |
|
|
Less: Deferred income taxes |
|
|
3,838 |
|
|
|
3,067 |
|
|
|
5,013 |
|
|
|
18,485 |
|
|
|
45,184 |
|
|
Current tax (benefit) expense |
|
$ |
(1,906 |
) |
|
$ |
1,710 |
|
|
$ |
1,846 |
|
|
$ |
(140 |
) |
|
$ |
8,476 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Changes in derivatives receivable (payable) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivatives receivable (payable), end of period |
|
$ |
271 |
|
|
$ |
(952 |
) |
|
$ |
(4,574 |
) |
|
$ |
271 |
|
|
$ |
(4,574 |
) |
|
Derivatives payable, beginning of period |
|
|
952 |
|
|
|
677 |
|
|
|
16,659 |
|
|
|
4,574 |
|
|
|
6,396 |
|
|
Derivative premiums paid |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
46,111 |
|
|
Change in derivatives receivable (payable) |
|
$ |
1,223 |
|
|
$ |
(275 |
) |
|
$ |
12,085 |
|
|
$ |
4,845 |
|
|
$ |
47,933 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
W&T OFFSHORE, INC. AND
SUBSIDIARIESNon-GAAP Information |
|
Reconciliation of PV-10 to Standardized
Measure |
|
The Company also discloses PV-10, which is not a
financial measure defined under GAAP. The standardized measure of
discounted future net cash flows is the most directly comparable
GAAP financial measure for proved reserves calculated using SEC
pricing. Company management believes that the non-GAAP financial
measure of PV-10 is relevant and useful for evaluating the relative
monetary significance of oil and natural gas properties. PV-10 is
also used internally when assessing the potential return on
investment related to oil and natural gas properties and in
evaluating acquisition opportunities. Company management believes
that the use of PV-10 is valuable because there are many unique
factors that can impact an individual company when estimating the
amount of future income taxes to be paid. Additionally, Company
management believes that the presentation of PV-10 provides useful
information to investors because it is widely used by professional
analysts and sophisticated investors in evaluating oil and natural
gas companies. PV-10 is not a measure of financial or operating
performance under GAAP, nor is it intended to represent the current
market value of the Company’s estimated oil and natural gas
reserves. PV-10 should not be considered in isolation or as
substitutes for the standardized measure of discounted future net
cash flows as defined under GAAP. Investors should not assume that
PV-10 of the Company’s proved oil and natural gas reserves
represents a current market value of the Company’s estimated oil
and natural gas reserves.
The following table presents a reconciliation of
the standardized measure of discounted future net cash flows
relating to the Company’s estimated proved oil and natural gas
reserves, a GAAP measure, to PV-10, as defined by the Company.
|
|
|
|
|
|
|
|
|
December 31, |
|
|
2023 |
|
|
2022 |
|
PV-10 |
|
$ |
1,080.9 |
|
|
$ |
3,128.6 |
|
Future income taxes, discounted at 10% |
|
|
(151.0 |
) |
|
|
(594.1 |
) |
PV-10 after ARO |
|
|
929.9 |
|
|
|
2,534.5 |
|
Present value of estimated ARO, discounted at 10% |
|
|
(246.7 |
) |
|
|
(271.5 |
) |
Standardized measure |
|
$ |
683.2 |
|
|
$ |
2,263.0 |
|
|
|
|
|
|
|
|
CONTACT: |
Al PetrieInvestor Relations
Coordinatorapetrie@wtoffshore.com713-297-8024 |
Sameer ParasnisExecutive VP and
CFOsparasnis@wtoffshore.com713-513-8654 |
W and T Offshore (NYSE:WTI)
過去 株価チャート
から 4 2024 まで 5 2024
W and T Offshore (NYSE:WTI)
過去 株価チャート
から 5 2023 まで 5 2024