HOUSTON, Nov. 1, 2017 /PRNewswire/ -- W&T Offshore,
Inc. (NYSE: WTI) today reported its third quarter 2017 operational
and financial results. Some of the key items for the quarter
and subsequent period include:
- Production for the third quarter of 2017 was impacted by well
maintenance, weather, pipeline outages, and platform maintenance
that collectively resulted in deferred production of almost 4,900
Boe per day. Current production is running at around 40,000 Boe per
day and is expected to average around 40,000 Boe per day in the
fourth quarter of 2017. Production for the third quarter of 2017
averaged 36,459 barrels of oil equivalent ("Boe") per day (or 3.4
million Boe for the quarter), 60% of which was oil and natural gas
liquids ("NGLs"), compared to 41,508 Boe per day in the third
quarter of 2016.
- Revenues were $110.3 million, up
$2.9 million, or 3% compared to the
third quarter of 2016. Oil and NGLs sales made up 77% of revenues
in the third quarter of 2017 compared to 72% in the third quarter
of 2016.
- Lease operating expenses (LOE) were $35.1 million compared to $37.5 million in the third quarter of 2016.
- Operating income was $15.7
million compared to an operating loss in the third quarter
of 2016 of $58.3 million, which
included a non-cash ceiling test write-down of $57.9 million.
- Interest expense, net of amount capitalized, decreased 51%, to
$11.6 million in the third quarter of
2017 compared to $23.7 million in the
third quarter of 2016.
- Excluding special items, our adjusted net income was
$6.0 million and earnings were
$0.04 per share. (See definitions and
reconciliations of non-GAAP measures to GAAP measures at the end of
this news release.) On a GAAP basis, pre-tax income was
$4.2 million and federal income tax
expense was $5.5 million resulting in
a net loss of $1.3 million. (Please
see the Income Tax section of this release for a description of
this unusual occurrence.)
- Cash flow from operating activities increased to $130.3 million for the first nine months of 2017
representing an improvement of $139.5
million over the same period in 2016.
- Adjusted EBITDA for the third quarter of 2017 was $57.2 million, up $4.7
million compared to the third quarter of 2016. Adjusted
EBITDA for the first nine months of 2017 was $195.5 million, up $85.7
million over the same period in 2016. Our Adjusted EBITDA
margin was 55% for the first nine months of 2017, up from 39% in
the first nine months of 2016. (See definitions and reconciliations
of non-GAAP measures to GAAP measures at the end of this news
release.)
- In early September the Bureau of Ocean Energy Management
("BOEM") rescinded its four orders issued in 2016 that instructed
W&T to provide additional supplemental bonding of $260.8 million. The Company is in compliance with
its financial assurance obligations to the BOEM and has no
outstanding BOEM orders related to financial assurance
obligations.
Tracy W. Krohn, W&T
Offshore's Chairman and Chief Executive Officer, stated, "We
continue to have great success with the drill bit and are still at
a 100% success rate in 2017, which is identical to the last few
years at 100%. Through the end of October 2017 we have drilled four successful
wells this year and expect more to come. We are in the
process of completing the Ship Shoal 300 B-5 ST well, a field
extension well in our highly successful SS300 field, which
encountered 172 feet of net stacked pay. This Gulf of Mexico
shelf well was drilled from our SS 300 B platform and is expected
to be on line as soon as we demobilize the rig. We are very
encouraged by the success of this well which has exceeded our
pre-drill expectations and is adding reserves and value in the
field.
"We are currently drilling the A-17 well at Ship Shoal 349
"Mahogany" which is planned to test and extend the western limits
of the field. The Mahogany field continues to perform
exceptionally well and offers substantial upside potential.
As we experienced with the prolific P-sand in the field, the total
recoverable reserves resulting from the T-sand have continued to
increase since our initial booking. Strong production from
the reservoir along with positive drilling results is proving up
larger amounts of oil in place. Assuming success, the
A-17 well will be on line late in the fourth quarter of 2017.
Once we have drilled and completed the A-17 well we will begin
drilling the A-5 ST.
"We also have a number of high-quality low-risk exploration
opportunities underway or planned for the near-future that offer
substantial potential for solid reserve and production
additions. We have commenced drilling an exploratory well at
South Timbalier 224 and an exploratory well at Main Pass 286.
Both wells are in open water locations on the shelf. Assuming
success, the South Timbalier well could be online in late 2018 and
the Main Pass 286 well in early 2019. Field extension wells
are planned at our Ewing Banks 910
field and at Viosca Knoll 823 ("Virgo") towards the end of this
year, and that will carry over into what should be a very active
2018," concluded Mr. Krohn.
Production, Revenues and Price: Total production was 3.4
million barrels of oil equivalent ("MMBoe") in the third quarter of
2017, down from 3.8 MMBoe in the third quarter of 2016.
The Mahogany, Ewing Bank 910, and
Virgo fields delivered the largest production increases for the
third quarter of 2017 compared to the third quarter of 2016 because
of our successful work programs. Production for the third
quarter of 2017 was negatively impacted by well maintenance,
weather, pipeline outages, and platform maintenance that
collectively resulted in deferred production of almost 4,900 Boe
per day.
Revenues for the third quarter of 2017 increased 3% to
$110.3 million compared to
$107.4 million in the third quarter
of 2016. The increase in revenues was due to a 16% increase
in our realized commodity price, offset by a 12% decline in
production volumes. We sold 36,459 Boe per day at an average
realized sales price of $32.43 per
Boe compared to 41,508 Boe per day sold at an average realized
sales price of $27.97 per Boe in the
third quarter of 2016. In the second quarter of 2017, we sold
43,084 Boe per day at an average realized sales price of
$31.10 per Boe.
Lease Operating Expenses: Lease operating expense
("LOE"), which includes base lease operating expenses, insurance
premiums, workovers and facilities maintenance, decreased
$2.4 million to $35.1 million in the third quarter of 2017
compared to the third quarter of 2016. On a component basis, base
lease operating expenses decreased $4.0
million and workover expenses decreased $1.2 million, partially offset by increased
facilities maintenance expense of $2.2
million and increased insurance premiums of $0.6 million. Base lease operating expenses
decreased primarily due to continued cost reduction efforts by the
Company, cost reductions at non-operated properties and lower
processing costs at one of our fields. The decrease in
workover expenses was primarily due to reclassifying such costs to
a capital project as the result of a workover turning into a
sidetrack well. The facility maintenance expense increase is
primarily due to engine and compressor overhauls and maintenance at
several platforms.
Depreciation, depletion, amortization and accretion
("DD&A"): DD&A, including accretion for asset
retirement obligations ("ARO"), decreased to $10.88 per Boe for the third quarter of 2017 from
$13.49 per Boe for the third quarter
of 2016. On a nominal basis, DD&A decreased $15.0 million to $36.5
million for the third quarter of 2017 from $51.5 million for the third quarter of 2016
primarily due to a decrease in the DD&A rate per Boe.
DD&A decreased primarily due to the ceiling test write-downs
recorded during 2016 and lower capital expenditures in relation to
DD&A expense during 2016, both of which lowers the full-cost
pool subject to DD&A.
General and Administrative Expenses ("G&A"):
G&A increased to $15.6 million
for the third quarter of 2017 compared to $12.7 million in the third quarter of 2016.
Increases in incentive compensation in 2017 and the expense
impact of reinstating the Company's match of employee's 401(K)
contributions were partially offset by reductions in salaries and
share-based compensation. In the third quarter of 2016, no
accruals were made for the short-term incentive program and
transaction costs related to the Exchange Transaction previously
recorded as G&A expenses were reclassified to Gain on
Exchange of Debt, which is a transaction completed in September
2016.
Derivative (gain) loss: The third quarter of
2017 reflects a $2.9 million
derivative loss associated with our crude oil and natural gas
derivative contracts, which includes settled contracts and open
contracts recorded at fair value as of September 30, 2017. We entered into
derivative contracts for crude oil and natural gas during the first
quarter of 2017, relating to a portion of our 2017 estimated
production. The third quarter of 2016 reflects a $0.4 million derivative loss for our crude oil
and natural gas derivative contracts.
Interest expense: Interest expense, net of amounts
capitalized, was $11.6 million in the
third quarter of 2017, decreasing 51% from the $23.6 million for the third quarter of
2016. The decrease was primarily attributable to the Exchange
Transaction that was completed on September
7, 2016. In addition, interest expense was lower as we
had no borrowings on the revolving bank credit facility during the
third quarter of 2017 compared to borrowings averaging over
$100 million during the third quarter
of 2016.
Income Tax: Our income tax expense in the third
quarter of 2017 was $5.5 million on
pre-tax income of $4.2 million.
Under generally accepted accounting principles we are required to
use the effective tax rate method in computing income tax expense
or benefit for interim periods. Somewhat improving commodity
prices and a relatively lower forecasted spend for plug and
abandonment work in 2017 revised our forecast which required us to
reduce the amount of benefits previously recorded in the first half
of 2017 under the effective tax rate method. Based on current
information, we expect our full year tax benefit to be around
$14 million. In the third
quarter of 2016 we recorded a tax benefit of $3.8 million. Our annualized effective tax
rate for the third quarter of 2017 and 2016 is not
meaningful. The income tax benefit for both periods relates to
NOL carryback claims made pursuant to IRC Section 172(f) (related
to rules for "specified liability losses"), which permit certain
platform dismantlement, well abandonment and site clearance costs
to be carried back 10 years. For both periods, adjustments in
the valuation allowance offset changes in net deferred tax
assets.
As of September 30, 2017, the
balance sheet reflects current income tax receivables of
$11.6 million and non-current income
tax receivables of $52.1 million.
The current income tax receivables as of September 30, 2017 relates to our estimated NOL
carryback claim for 2017 associated with our plug and abandonment
spending in 2017. The non-current income tax receivables
relates to our NOL claims for the years 2012, 2013 and 2014 that
were carried back to prior years and to an estimated NOL claim for
2017 that is expected to be filed subsequent to December 31, 2017. These carryback claims
are made pursuant to IRC Section 172(f) described above.
Net Income (Loss) & Earnings Per Share:
For the third quarter of 2017, excluding special items, our
adjusted net income was $6.0 million
and our earnings per share were $0.04
per share. We reported pre-tax income of $4.2 million, federal income tax expense of
$5.5 million and a net loss of
$1.3 million or $0.01 per common share. This compares to a
third quarter 2016 reported net income of $45.9 million, or $0.48 per common share. Excluding special
items (including a non-cash ceiling test write-down of oil and
natural gas properties, a gain on exchange of debt, other minor
non-operating costs, and an unrealized commodity derivative loss,
all net of applicable federal income tax) the adjusted net loss was
$22.6 million and adjusted loss per
share was $0.24 per share for the
third quarter of 2016. (See the "Reconciliation of Net Income
(Loss) to Net Income (Loss) Excluding Special Items" and related
earnings per share, excluding special items in the table under
"Non-GAAP Information" at the end of this news release for a
description of the special items.)
Cash Flow and Adjusted EBITDA: Net cash provided by
operating activities in the first nine months of 2017 was
$130.3 million compared to net cash
used by operating activities of $9.2
million for the same period in 2016, an improvement of
$139.5 million between periods.
Cash flows from operating activities were $171.9 million in the first nine months of 2017,
(before changes in working capital, insurance reimbursements,
escrow deposits and ARO settlements), compared to $42.8 million over the same period in 2016. The
increase in cash flows was primarily due to higher realized prices
for all our commodities - oil, NGLs and natural gas, lower
operating costs and lower interest payments.
Our combined average realized sales price per Boe increased 32%
in the first nine months of 2017, which caused total revenues to
increase $82.6 million (partially
offset by total decreases of 4% in production volumes which
included extraordinary downtime due to storms, pipeline repairs and
platform maintenance). Lease operating expenses decreased
$11.8 million, and interest expense,
net of amounts capitalized decreased $46.5
million. Other items affecting operating cash flows
for the nine months were ARO settlements of $56.2 million (essentially the same as in the
prior-year) and the escrow payment related to the Apache lawsuit of
$49.5 million, partially offset by
insurance reimbursements of $31.7
million and changes in receivables, accounts payable and
accrued liabilities of $30.2
million.
Adjusted EBITDA for the third quarter of 2017 was $57.2 million, up $4.7
million compared to the third quarter of 2016. Our
Adjusted EBITDA margin was 52% in the third quarter of 2017,
compared to 49% in the third quarter of 2016. Adjusted EBITDA
for the first nine months of 2017 was $195.5
million, up $85.7 million over
the same period in 2016. Our Adjusted EBITDA margin was 55%
for the first nine months of 2017, up from 39% in the first nine
months of 2016.
Adjusted EBITDA and Adjusted EBITDA margin are non-GAAP measures
and are defined in the "Non-GAAP Information" section at the end of
this news release.
Liquidity: At September 30,
2017, our total liquidity was $255.9
million, consisting of an unrestricted cash balance of
$106.2 million and $149.7 million of availability under our
$150 million revolving bank credit
facility.
Capital Expenditures: Our capital expenditures for
oil and gas properties on an accrual basis for the first nine
months of 2017 were $79.1 million
compared to $24.1 million for the
same period in 2016 ($73.4 million in
the 2017 period on a cash basis compared to $61.5 million for the 2016 period). In the
first nine months of 2017 over half of our capital expenditures
were dedicated to the four wells at our Mahogany field while the
remainder was dedicated to a new drill well at Ship Shoal 300,
recompletions at Main Pass 69 and High
Island 22 and a number of other fields. The remainder of the
expenditures was associated with development activities and
seismic.
For 2017, our capital budget remains at $125.0 million. Our plug and abandonment
activities for 2017 are currently estimated at approximately
$70.0 million. Capital
expenditures and abandonment activities are expected to be funded
with cash on hand and cash flow from operating activities.
OPERATIONS UPDATE
We currently have three rigs operating in the Gulf of Mexico.
Ship Shoal 349 "Mahogany" (100% WI, operated, shelf):
We are drilling the A-17 well, which will test and
extend the western limits of the field and the large T-sand
reservoir. Following the A-17 well, we plan to drill
the A-5 ST well targeting the 'Q' and 'P' sands that were logged
and evaluated in the A-18 well drilled earlier this year.
Workover and recompletion opportunities also exist at Mahogany and
will be done as time and operating conditions permit.
Mahogany production has averaged over 7,700 Boe per day net to our
interest in 2017.
Ship Shoal 300 B-5 ST (79% WI, operated, shelf):
Completion operations are currently underway at our SS 300 B-5 ST
well, which reached total depth of 5,772 feet on September 26, 2017. This exploration well
should be on line in the fourth quarter of 2017 and is being
completed as a dual producer. This is an extension well in
the highly successful SS300 field. The well was drilled from
our SS 300 B platform and encountered 172 feet of net stacked
pay.
South Timbalier 224 (39% WI, operated, shelf):
In mid-October 2017, we
mobilized a rig on location to begin drilling an exploration well
at ST 224 in approximately 170 feet of water. Seismic
indicates a large amplitude supported prospect located in a working
analog producing field trend. Although the well is in an open
water location, it is located near existing infrastructure and if
successful could be hooked up to any number of relatively nearby
platforms and placed on production in late 2018.
Viosca Knoll 823 "Virgo" (80% WI, operated,
deepwater): The A-10 ST well is expected to be the first
well in a multi-well drilling program at our Virgo field and
drilled off of the Virgo platform. If successful this well
could be online in the first quarter of 2018. Two additional
wells, the A-12 and the A-2ST wells, are also expected to be
drilled following completion operations of the A-10 ST.
Assuming success, these wells can be brought on line relatively
quickly.
Ewing Bank 910 (36% - 50% WI,
operated, deepwater): Two wells are planned in our
Ewing Bank 910 field, which are the
South Timbalier 311 A-2 and A-3 wells. We anticipate
beginning rig mobilization in the fourth quarter of 2017 with a
likely spud in the middle of the first quarter of 2018. We
view both of these wells to be low-risk exploration opportunities
with multiple stacked pay sands. If successful, these wells
can be brought on line quickly via existing infrastructure and
pipelines.
Main Pass 286 (100% WI, operated, shelf): This is an
exploratory well that is currently being drilled in an open water
location in 300 feet of water that is near existing infrastructure
owned by W&T. The target is a strong amplitude variation
with offset (AVO) supported Middle Miocene oil prospect in the Cris
I sand at a target depth of 14,100'.
Well Recompletions and Workovers: The Main Pass 69
E-1 recompletion was finished and put on line recently. We
have another six recompletions of various wells to do for the
remainder of this year. So far this year, we have performed eleven
recompletions that added approximately 2,400 Boe per day of
production and ten workovers that have added approximately 5,400
Boe per day of production.
Fourth Quarter and Full Year 2017 Outlook:
Our guidance for the fourth quarter and full year 2017 in the
table below represents the Company's best estimate of the range of
likely future results. Fourth quarter guidance reflects
approximately 174,000 Boe or over five days of production deferrals
related to downtime associated with Hurricane Nate in October 2017. Guidance could be affected by
the factors described below in "Forward-Looking Statements."
|
Fourth
Quarter
|
|
Prior Full
Year
|
|
Revised Full
Year
|
Production
|
2017
|
|
2017
|
|
2017
|
|
|
|
|
|
|
Oil and NGL's
(MMBbls)
|
2.0 - 2.2
|
|
8.4 - 9.3
|
|
8.3 - 8.8
|
|
|
|
|
|
|
Natural Gas
(Bcf)
|
8.8 - 9.7
|
|
36.1 -
40.0
|
|
36.1 -
38.3
|
|
|
|
|
|
|
Total
(Bcfe)
|
20.7 -
22.8
|
|
86.9 -
96.0
|
|
85.8 -
91.1
|
|
|
|
|
|
|
Total
(MMBoe)
|
3.4 - 3.8
|
|
14.5 -
16.0
|
|
14.3 -
15.2
|
|
|
|
|
|
|
Operating
Expenses
|
Fourth
Quarter
|
|
Prior Full
Year
|
|
Revised Full
Year
|
($ in
millions)
|
2017
|
|
2017
|
|
2017
|
|
|
|
|
|
|
Lease operating
expenses
|
$37 - $41
|
|
$149 -
$165
|
|
$139 -
$153
|
|
|
|
|
|
|
Gathering,
transportation &
|
|
|
|
|
|
production
taxes
|
$6 - $7
|
|
$25 - $28
|
|
$22 - $25
|
|
|
|
|
|
|
General and
administrative
|
$14 - $16
|
|
$56 - $62
|
|
$58 - $62
|
|
|
|
|
|
|
Income tax rate
benefit
|
|
|
32%
|
|
26%
|
Conference Call Information: W&T will hold a
conference call to discuss our financial and operational results on
Thursday, November 2, 2017, at
10:00 a.m. Eastern Time (9:00 a.m. Central Time). To participate,
dial 412-902-0030 a few minutes before the call begins. The
call will also be broadcast live over the Internet from the
Company's website at www.wtoffshore.com. An updated investor
presentation can be accessed from the Company's website. A
replay of the conference call will be available after the call
until November 9, 2017, and may be
accessed by calling 201-612-7415 and using the passcode
13672623#.
About W&T Offshore
W&T Offshore, Inc. is an independent oil and natural gas
producer with operations offshore in the Gulf of Mexico and has grown through
acquisitions, exploration and development. The Company
currently has working interests in approximately 50 producing
fields in federal and state waters and has under lease
approximately 710,000 gross acres, including approximately 460,000
gross acres on the Gulf of Mexico Shelf and approximately 250,000
gross acres in the deepwater. A majority of the Company's
daily production is derived from wells it operates. For more
information on W&T Offshore, please visit the Company's website
at www.wtoffshore.com.
Forward-Looking Statements
This press release contains forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. These forward-looking statements reflect our current views
with respect to future events, based on what we believe are
reasonable assumptions. No assurance can be given, however, that
these events will occur. These statements are subject to risks and
uncertainties that could cause actual results to differ materially
including, among other things, market conditions, oil and gas price
volatility, uncertainties inherent in oil and gas production
operations and estimating reserves, unexpected future capital
expenditures, competition, the success of our risk management
activities, governmental regulations, uncertainties and other
factors discussed in W&T Offshore's Annual Report on Form 10-K
for the year ended December 31, 2016
and subsequent Form 10-Q reports found at www.sec.gov or at our
website at www.wtoffshore.com under the Investor Relations section.
Investors are urged to consider closely the disclosures and risk
factors in these reports.
W&T OFFSHORE,
INC. AND SUBSIDIARIES
|
Condensed
Consolidated Statements of Income (Loss)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
|
September
30,
|
|
September
30,
|
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
|
(In thousands,
except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
$
|
110,281
|
|
$
|
107,403
|
|
$
|
357,997
|
|
$
|
284,773
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating costs and
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Lease operating
expenses
|
|
|
35,134
|
|
|
37,520
|
|
|
106,817
|
|
|
118,611
|
Gathering,
transportation costs and production taxes
|
|
|
4,448
|
|
|
5,643
|
|
|
16,939
|
|
|
18,029
|
Depreciation,
depletion, amortization and accretion
|
|
|
36,489
|
|
|
51,500
|
|
|
116,843
|
|
|
172,726
|
Ceiling test
write-down of oil and natural gas properties
|
|
|
-
|
|
|
57,912
|
|
|
-
|
|
|
279,063
|
General and
administrative expenses
|
|
|
15,631
|
|
|
12,692
|
|
|
45,379
|
|
|
45,370
|
Derivative (gain)
loss
|
|
|
2,879
|
|
|
412
|
|
|
(4,765)
|
|
|
2,861
|
Total costs and
expenses
|
|
|
94,581
|
|
|
165,679
|
|
|
281,213
|
|
|
636,660
|
Operating income
(loss)
|
|
|
15,700
|
|
|
(58,276)
|
|
|
76,784
|
|
|
(351,887)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense, net
of amounts capitalized
|
|
|
11,554
|
|
|
23,618
|
|
|
34,284
|
|
|
80,760
|
Gain on exchange of
debt
|
|
|
-
|
|
|
123,960
|
|
|
7,811
|
|
|
123,960
|
Other (income)
expense, net
|
|
|
(41)
|
|
|
(73)
|
|
|
5,073
|
|
|
1,209
|
Income (loss) before
income tax expense (benefit)
|
|
|
4,187
|
|
|
42,139
|
|
|
45,238
|
|
|
(309,896)
|
Income tax expense
(benefit)
|
|
|
5,484
|
|
|
(3,789)
|
|
|
(11,079)
|
|
|
(44,393)
|
Net income
(loss)
|
|
$
|
(1,297)
|
|
$
|
45,928
|
|
$
|
56,317
|
|
$
|
(265,503)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted
earnings (loss) per common share
|
|
$
|
(0.01)
|
|
$
|
0.48
|
|
$
|
0.39
|
|
$
|
(3.25)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
common shares outstanding
|
|
|
137,575
|
|
|
92,243
|
|
|
137,547
|
|
|
81,748
|
W&T OFFSHORE,
INC. AND SUBSIDIARIES
|
Condensed
Operating Data
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
|
|
|
|
September
30,
|
|
|
|
|
Variance
|
|
|
2017
|
|
2016
|
|
Variance
|
|
Percentage(2)
|
Net sales
volumes:
|
|
|
|
|
|
|
|
|
|
|
|
Oil
(MBbls)
|
|
|
1,700
|
|
|
1,791
|
|
|
(91)
|
|
-5.1%
|
NGL
(MBbls)
|
|
|
299
|
|
|
372
|
|
|
(73)
|
|
-19.6%
|
Oil and NGLs
(MBbls)
|
|
|
1,999
|
|
|
2,163
|
|
|
(164)
|
|
-7.6%
|
Natural gas
(MMcf)
|
|
|
8,130
|
|
|
9,935
|
|
|
(1,805)
|
|
-18.2%
|
Total oil and natural
gas (MBoe) (1)
|
|
|
3,354
|
|
|
3,819
|
|
|
(465)
|
|
-12.2%
|
Total oil and natural
gas (MMcfe) (1)
|
|
|
20,125
|
|
|
22,912
|
|
|
(2,787)
|
|
-12.2%
|
|
|
|
|
|
|
|
|
|
|
|
|
Average daily
equivalent sales (Boe/d)
|
|
|
36.4
|
|
|
41.5
|
|
|
(5.1)
|
|
-12.2%
|
Average daily
equivalent sales (MMcfe/d)
|
|
|
218.8
|
|
|
249.0
|
|
|
(30.3)
|
|
-12.2%
|
|
|
|
|
|
|
|
|
|
|
|
|
Average realized
sales prices:
|
|
|
|
|
|
|
|
|
|
|
|
Oil
($/Bbl)
|
|
$
|
45.92
|
|
$
|
39.62
|
|
$
|
6.30
|
|
15.9%
|
NGLs
($/Bbl)
|
|
|
22.07
|
|
|
18.02
|
|
|
4.05
|
|
22.5%
|
Oil and NGLs
($/Bbl)
|
|
|
42.35
|
|
|
35.91
|
|
|
6.44
|
|
17.9%
|
Natural gas
($/Mcf)
|
|
|
2.97
|
|
|
2.93
|
|
|
0.04
|
|
1.4%
|
Barrel of oil
equivalent ($/Boe)
|
|
|
32.43
|
|
|
27.97
|
|
|
4.46
|
|
15.9%
|
Natural gas
equivalent ($/Mcfe)
|
|
|
5.40
|
|
|
4.66
|
|
|
0.74
|
|
15.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
Average per Boe
($/Boe):
|
|
|
|
|
|
|
|
|
|
|
|
Lease operating
expenses
|
|
$
|
10.48
|
|
$
|
9.82
|
|
$
|
0.66
|
|
6.7%
|
Gathering and
transportation costs and production taxes
|
|
|
1.33
|
|
|
1.48
|
|
|
(0.15)
|
|
-10.1%
|
Depreciation,
depletion, amortization and accretion
|
|
|
10.88
|
|
|
13.49
|
|
|
(2.61)
|
|
-19.3%
|
General and
administrative expenses
|
|
|
4.66
|
|
|
3.32
|
|
|
1.34
|
|
40.4%
|
|
|
|
|
|
|
|
|
|
|
|
|
Average per Mcfe
($/Mcfe):
|
|
|
|
|
|
|
|
|
|
|
|
Lease operating
expenses
|
|
$
|
1.75
|
|
$
|
1.64
|
|
$
|
0.11
|
|
6.7%
|
Gathering and
transportation costs and production taxes
|
|
|
0.22
|
|
|
0.25
|
|
|
(0.03)
|
|
-12.0%
|
Depreciation,
depletion, amortization and accretion
|
|
|
1.81
|
|
|
2.25
|
|
|
(0.44)
|
|
-19.6%
|
General and
administrative expenses
|
|
|
0.78
|
|
|
0.55
|
|
|
0.23
|
|
41.8%
|
|
(1) MMcfe and MBoe
are 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.
|
|
(2) Variance
percentages are calculated using rounded figures and may result in
slightly different figures for comparable data.
|
W&T OFFSHORE,
INC. AND SUBSIDIARIES
|
Condensed
Operating Data
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months
Ended
|
|
|
|
|
|
|
|
September
30,
|
|
|
|
|
Variance
|
|
|
2017
|
|
2016
|
|
Variance
|
|
Percentage(2)
|
Net sales
volumes:
|
|
|
|
|
|
|
|
|
|
|
|
Oil
(MBbls)
|
|
|
5,428
|
|
|
5,532
|
|
|
(104)
|
|
-1.9%
|
NGL
(MBbls)
|
|
|
1,024
|
|
|
1,180
|
|
|
(156)
|
|
-13.2%
|
Oil and NGLs
(MBbls)
|
|
|
6,451
|
|
|
6,712
|
|
|
(261)
|
|
-3.9%
|
Natural gas
(MMcf)
|
|
|
28,005
|
|
|
29,696
|
|
|
(1,691)
|
|
-5.7%
|
Total oil and natural
gas (MBoe) (1)
|
|
|
11,119
|
|
|
11,661
|
|
|
(542)
|
|
-4.6%
|
Total oil and natural
gas (MMcfe) (1)
|
|
|
66,714
|
|
|
69,967
|
|
|
(3,253)
|
|
-4.6%
|
|
|
|
|
|
|
|
|
|
|
|
|
Average daily
equivalent sales (Boe/d)
|
|
|
40.7
|
|
|
42.6
|
|
|
(1.8)
|
|
-4.3%
|
Average daily
equivalent sales (MMcfe/d)
|
|
|
244.4
|
|
|
255.4
|
|
|
(11.0)
|
|
-4.3%
|
|
|
|
|
|
|
|
|
|
|
|
|
Average realized
sales prices:
|
|
|
|
|
|
|
|
|
|
|
|
Oil
($/Bbl)
|
|
$
|
45.81
|
|
$
|
35.01
|
|
$
|
10.80
|
|
30.8%
|
NGLs
($/Bbl)
|
|
|
21.88
|
|
|
15.85
|
|
|
6.03
|
|
38.0%
|
Oil and NGLs
($/Bbl)
|
|
|
42.01
|
|
|
31.64
|
|
|
10.37
|
|
32.8%
|
Natural gas
($/Mcf)
|
|
|
2.97
|
|
|
2.33
|
|
|
0.64
|
|
27.5%
|
Barrel of oil
equivalent ($/Boe)
|
|
|
31.85
|
|
|
24.15
|
|
|
7.70
|
|
32.0%
|
Natural gas
equivalent ($/Mcfe)
|
|
|
5.31
|
|
|
4.02
|
|
|
1.29
|
|
32.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
Average per Boe
($/Boe):
|
|
|
|
|
|
|
|
|
|
|
|
Lease operating
expenses
|
|
$
|
9.61
|
|
$
|
10.17
|
|
$
|
(0.56)
|
|
-5.5%
|
Gathering and
transportation costs and production taxes
|
|
|
1.52
|
|
|
1.55
|
|
|
(0.03)
|
|
-1.9%
|
Depreciation,
depletion, amortization and accretion
|
|
|
10.51
|
|
|
14.81
|
|
|
(4.30)
|
|
-29.0%
|
General and
administrative expenses
|
|
|
4.08
|
|
|
3.89
|
|
|
0.19
|
|
4.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
Average per Mcfe
($/Mcfe):
|
|
|
|
|
|
|
|
|
|
|
|
Lease operating
expenses
|
|
$
|
1.60
|
|
$
|
1.70
|
|
$
|
(0.10)
|
|
-5.9%
|
Gathering and
transportation costs and production taxes
|
|
|
0.25
|
|
|
0.26
|
|
|
(0.01)
|
|
-3.8%
|
Depreciation,
depletion, amortization and accretion
|
|
|
1.75
|
|
|
2.47
|
|
|
(0.72)
|
|
-29.1%
|
General and
administrative expenses
|
|
|
0.68
|
|
|
0.65
|
|
|
0.03
|
|
4.6%
|
|
(1) MMcfe and MBoe
are 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.
|
|
(2) Variance
percentages are calculated using rounded figures and may result in
slightly different figures for comparable data.
|
W&T OFFSHORE,
INC. AND SUBSIDIARIES
|
Condensed
Consolidated Balance Sheets
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
September
30,
|
|
December
31,
|
|
|
2017
|
|
2016
|
|
|
(In thousands,
except
|
|
|
share
data)
|
Assets
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
106,164
|
|
$
|
70,236
|
Receivables:
|
|
|
|
|
|
|
Oil and
natural gas sales
|
|
|
39,165
|
|
|
43,073
|
Joint
interest
|
|
|
21,877
|
|
|
21,885
|
Insurance reimbursement
|
|
|
-
|
|
|
30,100
|
Income
taxes
|
|
|
11,623
|
|
|
11,943
|
Total
receivables
|
|
|
72,665
|
|
|
107,001
|
Prepaid expenses and
other assets
|
|
|
15,073
|
|
|
14,504
|
Total current
assets
|
|
|
193,902
|
|
|
191,741
|
|
|
|
|
|
|
|
Property and
equipment
|
|
|
8,065,626
|
|
|
7,953,402
|
Less accumulated
depreciation, depletion and amortization
|
|
|
7,510,372
|
|
|
7,406,349
|
Net property and
equipment
|
|
|
555,254
|
|
|
547,053
|
Restricted deposits
for asset retirement obligations
|
|
|
25,339
|
|
|
27,371
|
Income tax
receivables
|
|
|
52,097
|
|
|
52,097
|
Escrow deposit -
Apache lawsuit
|
|
|
49,500
|
|
|
-
|
Other
assets
|
|
|
11,279
|
|
|
11,464
|
Total
assets
|
|
$
|
887,371
|
|
$
|
829,726
|
|
|
|
|
|
|
|
Liabilities and
Shareholders' Deficit
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
Accounts
payable
|
|
$
|
72,197
|
|
$
|
81,039
|
Undistributed oil and
natural gas proceeds
|
|
|
20,084
|
|
|
26,254
|
Asset retirement
obligations
|
|
|
29,456
|
|
|
78,264
|
Long-term
debt
|
|
|
11,147
|
|
|
8,272
|
Accrued
liabilities
|
|
|
26,550
|
|
|
9,200
|
Total current
liabilities
|
|
|
159,434
|
|
|
203,029
|
Long-term
debt:
|
|
|
|
|
|
|
Principal
|
|
|
873,733
|
|
|
873,733
|
Carrying value
adjustments
|
|
|
108,884
|
|
|
138,722
|
Long-term debt, less current portion - carrying value
|
|
|
982,617
|
|
|
1,012,455
|
|
|
|
|
|
|
|
Asset retirement
obligations, less current portion
|
|
|
275,560
|
|
|
256,174
|
Apache lawsuit
liability
|
|
|
49,500
|
|
|
-
|
Other
liabilities
|
|
|
17,531
|
|
|
17,105
|
Commitments and
contingencies
|
|
|
-
|
|
|
-
|
Shareholders'
deficit:
|
|
|
|
|
|
|
Common stock,
$0.00001 par value; 200,000,000 shares authorized;
140,690,917 issued and 137,821,744
outstanding at September 30, 2017; 140,543,545 issued
and 137,674,372 outstanding at
December 31, 2016
|
|
|
1
|
|
|
1
|
Additional paid-in
capital
|
|
|
545,422
|
|
|
539,973
|
Retained earnings
(deficit)
|
|
|
(1,118,527)
|
|
|
(1,174,844)
|
Treasury stock, at
cost
|
|
|
(24,167)
|
|
|
(24,167)
|
Total shareholders'
deficit
|
|
|
(597,271)
|
|
|
(659,037)
|
Total liabilities and
shareholders' deficit
|
|
$
|
887,371
|
|
$
|
829,726
|
W&T OFFSHORE,
INC. AND SUBSIDIARIES
|
Condensed
Consolidated Statements of Cash Flows
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
Nine Months
Ended
|
|
|
|
September
30,
|
|
|
|
2017
|
|
2016
|
|
|
|
(In
thousands)
|
|
|
|
|
|
Operating
activities:
|
|
|
|
|
|
|
|
Net Income
(loss)
|
|
$
|
56,317
|
|
$
|
(265,503)
|
|
Adjustments to
reconcile net loss to net cash provided by (used in) operating
activities:
|
|
|
|
|
|
|
|
Depreciation,
depletion, amortization and accretion
|
|
|
116,843
|
|
|
172,726
|
|
Ceiling test
write-down of oil and natural gas properties
|
|
|
-
|
|
|
279,063
|
|
Gain on exchange of
debt
|
|
|
(7,811)
|
|
|
(123,960)
|
|
Debt issuance costs
write-down/amortization of debt items
|
|
|
1,271
|
|
|
2,135
|
|
Share-based
compensation
|
|
|
5,449
|
|
|
7,642
|
|
Derivative (gain)
loss
|
|
|
(4,765)
|
|
|
2,861
|
|
Cash receipts on
derivative settlements
|
|
|
3,924
|
|
|
4,746
|
|
Deferred income
taxes
|
|
|
321
|
|
|
15,484
|
|
Changes in operating
assets and liabilities:
|
|
|
|
|
|
|
|
Oil and
natural gas receivables
|
|
|
3,906
|
|
|
294
|
|
Joint
interest receivables
|
|
|
8
|
|
|
4,281
|
|
Insurance reimbursements
|
|
|
31,740
|
|
|
-
|
|
Income
taxes
|
|
|
320
|
|
|
(52,392)
|
|
Prepaid
expenses and other assets
|
|
|
2,194
|
|
|
(16,128)
|
|
Escrow
deposit - Apache lawsuit
|
|
|
(49,500)
|
|
|
-
|
|
Asset
retirement obligation settlements
|
|
|
(56,226)
|
|
|
(56,167)
|
|
Accounts
payable, accrued liabilities and other
|
|
|
26,329
|
|
|
15,750
|
|
Net cash
provided by (used in) operating activities
|
|
|
130,320
|
|
|
(9,168)
|
|
|
|
|
|
|
|
|
|
Investing
activities:
|
|
|
|
|
|
|
|
Investment in oil and
natural gas properties and equipment
|
|
|
(79,088)
|
|
|
(24,062)
|
|
Changes in operating
assets and liabilities associated with investing
activities
|
|
|
5,679
|
|
|
(37,400)
|
|
Proceeds from sales
of assets
|
|
|
-
|
|
|
1,500
|
|
Purchases of
furniture, fixtures and other
|
|
|
(905)
|
|
|
(96)
|
|
Net cash used in
investing activities
|
|
|
(74,314)
|
|
|
(60,058)
|
|
|
|
|
|
|
|
|
|
Financing
activities:
|
|
|
|
|
|
|
|
Borrowings of
long-term debt - revolving bank credit facility
|
|
|
-
|
|
|
340,000
|
|
Repayments of
long-term debt - revolving bank credit facility
|
|
|
-
|
|
|
(340,000)
|
|
Issuance of 1.5 Lien
Term Loan
|
|
|
-
|
|
|
75,000
|
|
Payment of interest
on 1.5 Lien Term Loan
|
|
|
(6,170)
|
|
|
-
|
|
Payment of interest
on 2nd Lien PIK Toggle Notes
|
|
|
(7,335)
|
|
|
-
|
|
Payment of interest
on 3rd Lien PIK Toggle Notes
|
|
|
(6,201)
|
|
|
-
|
|
Debt
exchange/issuance costs
|
|
|
(421)
|
|
|
(17,920)
|
|
Other
|
|
|
49
|
|
|
83
|
|
Net cash provided by
(used in) financing activities
|
|
|
(20,078)
|
|
|
57,163
|
|
Increase (decrease)
in cash and cash equivalents
|
|
|
35,928
|
|
|
(12,063)
|
|
Cash and cash
equivalents, beginning of period
|
|
|
70,236
|
|
|
85,414
|
|
Cash and cash
equivalents, end of period
|
|
$
|
106,164
|
|
$
|
73,351
|
|
W&T OFFSHORE, INC. AND
SUBSIDIARIES
Non-GAAP Information
Certain financial information included in our 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 Income Excluding Special Items," "EBITDA" and
"Adjusted EBITDA." Our management uses these non-GAAP
financial measures in its analysis of our performance.
These disclosures may not be viewed as a substitute for results
determined in accordance with GAAP and are not necessarily
comparable to non-GAAP performance measures which may be reported
by other companies.
Reconciliation of Net Income (Loss) to Net
Income (Loss) Excluding Special Items
"Net Income (Loss) Excluding Special Items" does not include the
unrealized commodity derivative (gain) loss, default in payment by
joint interest partners, write-down of debt issue costs, ceiling
test write-down of oil and natural gas properties, gain on exchange
of debt, Apache lawsuit, East Cameron 321 settlement, civil
penalties, and associated income tax adjustments. Net Income
(Loss) Excluding Special Items is presented because the timing and
amount of these items cannot be reasonably estimated and affect the
comparability of operating results from period to period, and
current periods to prior periods.
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
|
September
30,
|
|
September
30,
|
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
|
(In thousands,
except per share amounts)
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
|
$
|
(1,297)
|
|
$
|
45,928
|
|
$
|
56,317
|
|
$
|
(265,503)
|
Unrealized commodity
derivative (gain) loss
|
|
|
4,595
|
|
|
412
|
|
|
(841)
|
|
|
7,606
|
Default in payment by
joint interest partners
|
|
|
385
|
|
|
928
|
|
|
860
|
|
|
2,331
|
Write-down debt issue
costs
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
1,368
|
Ceiling test
write-down of oil and natural gas properties
|
|
|
-
|
|
|
57,912
|
|
|
-
|
|
|
279,063
|
Gain on exchange of
debt
|
|
|
-
|
|
|
(123,960)
|
|
|
(7,811)
|
|
|
(123,960)
|
Apache
lawsuit
|
|
|
-
|
|
|
-
|
|
|
6,285
|
|
|
-
|
EC 321
settlement
|
|
|
-
|
|
|
-
|
|
|
(1,109)
|
|
|
-
|
Civil
Penalties
|
|
|
-
|
|
|
-
|
|
|
1,820
|
|
|
-
|
Income tax adjustment
for the items above
|
|
|
(1,743)
|
|
|
(3,789)
|
|
|
279
|
|
|
(23,796)
|
Income tax adjustment
for effective tax rate for the quarter
|
|
|
4,019
|
|
|
-
|
|
|
-
|
|
|
-
|
Net income (loss)
excluding special items
|
|
$
|
5,959
|
|
$
|
(22,569)
|
|
$
|
55,800
|
|
$
|
(122,891)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted
income (loss) per common share, excluding special items
|
|
$
|
0.04
|
|
$
|
(0.24)
|
|
$
|
0.39
|
|
$
|
(1.50)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
W&T OFFSHORE, INC. AND
SUBSIDIARIES
Non-GAAP Information
Reconciliation of Net Income (Loss) to
Adjusted EBITDA
We define EBITDA as net income (loss) plus income tax expense
(benefit), net interest expense, depreciation, depletion,
amortization, and accretion and ceiling test write-down of oil and
natural gas properties. Adjusted EBITDA excludes the unrealized
commodity derivative (gain) loss, default in payment by joint
interest partners, gain on exchange of debt, Apache lawsuit, East
Cameron 321 settlement, civil penalties, and write-down of debt
issue costs. We believe the presentation of EBITDA and
Adjusted EBITDA provides useful information regarding our ability
to service debt and to fund capital expenditures. We believe
this presentation is relevant and useful because it helps our
investors understand our operating performance and makes it easier
to compare our results with those of other companies that have
different financing, capital and tax structures. EBITDA and
Adjusted EBITDA should not be considered in isolation from or as a
substitute for net income (loss), as an indication of operating
performance or cash flows from operating activities or as a measure
of liquidity. EBITDA and Adjusted EBITDA, as we calculate
them, may not be comparable to EBITDA and Adjusted EBITDA measures
reported by other companies. In addition, EBITDA and Adjusted
EBITDA do not represent funds available for discretionary use.
Adjusted EBITDA margin represents the ratio of Adjusted EBITDA to
total revenues.
The following table presents a reconciliation of our net income
(loss) to EBITDA and Adjusted EBITDA along with our Adjusted EBITDA
margin.
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
|
September
30,
|
|
September
30,
|
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
|
(In
thousands)
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
|
$
|
(1,297)
|
|
$
|
45,928
|
|
$
|
56,317
|
|
$
|
(265,503)
|
Income tax expense
(benefit)
|
|
|
5,484
|
|
|
(3,789)
|
|
|
(11,079)
|
|
|
(44,393)
|
Net interest
expense
|
|
|
11,513
|
|
|
23,546
|
|
|
34,231
|
|
|
80,602
|
Depreciation,
depletion, amortization and accretion
|
|
|
36,489
|
|
|
51,500
|
|
|
116,843
|
|
|
172,726
|
Ceiling test
write-down of oil and natural gas properties
|
|
|
-
|
|
|
57,912
|
|
|
-
|
|
|
279,063
|
EBITDA
|
|
|
52,189
|
|
|
175,097
|
|
|
196,312
|
|
|
222,495
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized commodity
derivative (gain) loss
|
|
|
4,595
|
|
|
412
|
|
|
(841)
|
|
|
7,606
|
Default in payment by
joint interest partners
|
|
|
385
|
|
|
928
|
|
|
860
|
|
|
2,331
|
Gain on exchange of
debt
|
|
|
-
|
|
|
(123,960)
|
|
|
(7,811)
|
|
|
(123,960)
|
Apache
lawsuit
|
|
|
-
|
|
|
-
|
|
|
6,285
|
|
|
-
|
EC 321
settlement
|
|
|
-
|
|
|
-
|
|
|
(1,109)
|
|
|
-
|
Civil
Penalties
|
|
|
-
|
|
|
-
|
|
|
1,820
|
|
|
-
|
Write-down debt issue
costs
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
1,368
|
Adjusted
EBITDA
|
|
$
|
57,169
|
|
$
|
52,477
|
|
$
|
195,516
|
|
$
|
109,840
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
Margin
|
|
|
52%
|
|
|
49%
|
|
|
55%
|
|
|
39%
|
CONTACT:
|
Lisa
Elliott
|
Danny
Gibbons
|
|
Dennard Lascar
Associates
|
SVP &
CFO
|
|
lelliott@dennardlascar.com
|
investorrelations@wtoffshore.com
|
|
713-529-6600
|
713-624-7326
|
View original
content:http://www.prnewswire.com/news-releases/wt-offshore-announces-third-quarter-2017-operational-and-financial-results-300548041.html
SOURCE W&T Offshore, Inc.