HOUSTON, Nov. 2, 2016 /PRNewswire/ -- W&T Offshore,
Inc. (NYSE: WTI) today reported its third quarter 2016 operational
and financial results, as well as its 2016 fourth quarter and full
year production and expense guidance. Some of the key items
for the third quarter include:
- On September 7, 2016, completed
an Exchange Transaction (defined and described below) of
$710.2 million, or approximately 79%,
of our 8.50% Senior Notes due 2019 for new secured notes and common
stock. At the same time we closed on a new $75 million 1.5 Lien Term Loan. The Company
recognized a gain on the debt exchange of $124.0 million.
- Production for the third quarter of 2016 averaged 41,508
barrels of oil equivalent ("Boe") per day (3.8 million Boe for the
quarter), 56.6% of which was oil and natural gas liquids
("NGLs").
- Drilling has resumed on the A-18 well at Ship Shoal 349,
Mahogany.
- Revenues were $107.4 million,
72.3% of which was from oil and NGLs.
- Lease operating expenses (LOE) declined 16.7% to $37.5 million compared to the third quarter of
2015 reflecting our continued focus on cost reduction efforts.
- General and administrative (G&A) expenses decreased 23.2%
to $12.7 million compared to the
third quarter of 2015.
- Net income for the third quarter of 2016 was $45.9 million and earnings per share were
$0.48. Excluding special items, our
net income would have been a loss of $22.6
million or $0.24 per share.
Adjusted EBITDA was $52.5 million for
the third quarter of 2016 compared to $61.4
million in the third quarter of 2015. (See definitions and
reconciliations of non-GAAP measures to GAAP measures at the end of
this release.)
Tracy W. Krohn, W&T
Offshore's Chairman and Chief Executive Officer, stated, "We are
pleased to have received the support of our shareholders and senior
noteholders in completing our Exchange Transaction, significantly
improving our liquidity which in turn will allow us to turn our
focus toward new capital projects. While operating margins are
still below our historic levels, they have improved from early in
the year, allowing us to expand our capital program in 2016,
currently estimated at $60 million,
and pursue projects that were delayed when margins began declining
rapidly. We are currently working on our plan for 2017 and
expect to increase our capital budget to levels well above 2016
expenditures. We intend to devote more capital to drilling
and completing new wells along with an expanded recompletion
program.
"We are currently drilling the Ship Shoal 349 A-18 development
well in our Mahogany field, targeting the 'T' sand that has
produced so prolifically in the field's A-14 well since mid-2013.
During the industry downturn, we remained focused on evaluating the
drilling and production data from certain of the other wells
drilled in the field, as well as the advanced seismic data we have
acquired and interpreted to help us better understand Mahogany's
sub-salt opportunities. Additionally, we have a number of
recompletion and workover opportunities planned, including two
workovers at Mahogany, which offer low risk and solid returns from
wells that were drilled in stacked reservoirs with multiple pay
zones. These projects help us to maintain our production
profile with a modest capital budget.
"Although we are encouraged by the improved commodity prices, we
remain diligent about cost control and are maintaining a prudent
approach to spending. Over the last two years, we have
reduced LOE by 48% and G&A expense by 40% and believe that we
can continue to drive down costs. Our objective is to
maintain steady production on a modest capital budget in the range
of $75 million to $150 million per
year until we are confident that the time is right to return to a
more robust growth profile," added Mr. Krohn.
Exchange Transaction: On September 7, 2016, we consummated an exchange
transaction that reduced our long-term debt by $408.2 million, excluding our new 1.5 Lien Term
Loan (defined below) and before changes that result from accounting
for the Exchange Transaction as a Troubled Debt Restructuring
(described below). We exchanged approximately 79% of our
8.500% Senior Notes, due June 15,
2019 (the "Unsecured Senior Notes") in an aggregate
principal amount of $710.2 million
for: (i) 9.00%/10.75% Senior Second Lien PIK Toggle Notes, due
May 2020, in an aggregate principal
amount of $159.8 million (the "Second
Lien PIK Toggle Notes"); (ii) 8.50%/10.00% Third Lien PIK Toggle
Notes, due June 2021, in an aggregate
principal amount of $142.0 million
(the "Third Lien PIK Toggle Notes"); and (iii) 60.4 million shares
of our common stock (the "Debt Exchange"). The Second Lien
PIK Toggle Notes and Third Lien PIK Toggle Notes contain
payment-in-kind ("PIK") interest provisions, where certain
semiannual interest is added to the principal amount instead of
being paid in cash in the then current semiannual period. In
conjunction with the Debt Exchange, we issued a $75 million 1.5 Lien Term Loan with an interest
rate of 11%, due November 2019 (the
"1.5 Lien Term Loan") (collectively with the Debt Exchange, the
"Exchange Transaction"). We accounted for the Exchange
Transaction as a Troubled Debt Restructuring ("TDR") pursuant to
the guidance under Accounting Standard Codification 470-60,
Troubled Debt Restructuring. The Exchange Transaction
resulted in a gain of $124.0 million
due to the fact that the sum of the future undiscounted principal
and interest payments of the newly issued debt was less than the
net carrying value of the original debt (after adjusting for the
consideration in the form of the shares of common stock,
transaction costs of the Exchange Transaction, and the funds
received from the issuance of the 1.5 Lien Term Loan). Under
TDR accounting, all future principal and interest payments have
been recorded as a liability; therefore, no interest expense was
recorded for the new debt in September
2016 and no future interest expense will be recorded for the
new debt, thus our reported interest expense will be significantly
less than the contractual interest payments through the terms of
the new debt. To the extent interest on the new debt is paid
in cash in future periods it will reduce the liability recorded in
connection with such debt.
Production, Revenues and Price: For the third quarter of
2016, our oil production was 1.8 million barrels, down 9.2% from
the third quarter of 2015. NGL production was 371,571
barrels, down 4.4% from the third quarter of 2015 and natural gas
production was 9.9 billion cubic feet ("Bcf") for the third quarter
of 2016, down 14.6% from the third quarter of 2015. Our
combined total production was 3.8 million barrels of oil equivalent
("MMBoe") in the third quarter of 2016, down 11.2% from the third
quarter of 2015. Production was lower in the third quarter of
2016 compared to the third quarter of 2015 due to natural
production declines, pipeline outages, field and platform
maintenance and the loss of production as a result of the sale of
our Yellow Rose field in October 2015. This was partially
offset by new oil production from the development of certain
deepwater fields within the last year (Big Bend, Dantzler and EW
910).
During the quarter we experienced production deferrals
attributable to third-party pipeline outages, operational issues,
and maintenance, which occurred at Mahogany, East Cameron 321 A and
various other locations. We estimate production deferrals
reduced our quarterly production by approximately 0.2 MMBoe during
the third quarter of 2016.
Revenues for the third quarter of 2016 were $107.4 million compared to $126.2 million in the third quarter of 2015.
The decrease in revenues was primarily due to a 3.3% decline
in realized commodity prices, combined with an 11.2% decrease in
production. Our average realized crude oil sales price was
down $4.23 per barrel, or 9.6%,
between the two quarters. NGLs prices improved 7.6%, or
$1.28 per barrel and natural gas
prices improved 8.9% or $0.24 per Mcf
from the third quarter of 2015. During the third quarter of
2016, our average realized sales price for oil was $39.62 per barrel, $18.02 per barrel for NGLs and $2.93 per Mcf for natural gas. On a
combined basis, we sold 41,508 Boe per day at an average realized
sales price of $27.97 per Boe
compared to 46,757 Boe per day sold at an average realized sales
price of $28.92 per Boe in the third
quarter of 2015.
West Texas Intermediate ("WTI") crude oil prices averaged
$41.35 per barrel for the first nine
months of 2016 compared to our average realized crude oil price of
$35.01 per barrel. WTI is frequently
used to value domestically produced crude oil, and the majority of
our oil production is priced using the spot price for WTI as a base
price, then adjusted for the type and quality of crude oil and
other factors. Just like crude oil prices, the differentials
for our offshore crude oil have also experienced significant
volatility. For example, the monthly average differentials of
WTI crude oil prices versus Light Louisiana Sweet ("LLS"), Heavy
Louisiana Sweet ("HLS") and Poseidon crude oil prices for the first
nine months of 2016 were a positive $1.79 and $0.87,
and a negative $3.58 per barrel,
respectively. The majority of our crude oil is priced similar to
Poseidon and, therefore, is experiencing negative
differentials. In addition, a few of our crude oil fields
have a negative quality bank adjustment due to crude oil quality
which reduces our crude oil price realizations.
Lease Operating Expenses: LOE, which includes base lease
operating expenses, insurance premiums, workovers, and facilities
maintenance, decreased $7.5 million,
or 16.7%, to $37.5 million in the
third quarter of 2016 compared to the third quarter of 2015.
On a per Boe basis, LOE decreased to $9.82 per Boe in the third quarter of 2016, a
6.2% reduction compared to $10.47 per
Boe in the third quarter of 2015. On a component basis, base
lease operating expenses decreased $1.1
million, workover expense decreased $4.9 million, insurance premiums decreased
$1.7 million and facilities
maintenance increased $0.2
million. Base lease operating expenses decreased
primarily due to lower costs from service providers and the
elimination of field expenses related to the Yellow Rose field
which was sold in October 2015,
partially offset by costs related to our new deepwater fields at
Dantzler and Big Bend and lower production handling fees (cost
offsets) at our Mississippi Canyon 243 field (Matterhorn).
The decrease in workover costs was primarily due to the sale of the
Yellow Rose field and reduced activities offshore.
Depreciation, depletion, amortization and accretion
("DD&A"): DD&A, including accretion for ARO,
decreased to $13.49 per Boe for the
third quarter of 2016 from $22.62 per
Boe for the third quarter of 2015. On a nominal basis,
DD&A decreased to $51.5 million
for the third quarter of 2016 from $97.3
million for the third quarter of 2015 due to a decrease in
the DD&A rate per Boe and lower production volumes. DD&A on
a per Boe and nominal basis decreased primarily due to the ceiling
test write-downs recorded during 2015 and the first half of 2016
(the third quarter 2016 ceiling test write-down will not affect the
DD&A rate until the fourth quarter of 2016) and lower capital
expenditures in relation to DD&A expense, which lowers the
full-cost pool subject to DD&A. In addition, the proceeds
from the sale of our Yellow Rose field reduced the full cost pool
along with the removal of future development costs associated with
the Yellow Rose field reserves. Other factors affecting the
DD&A rate are lower future development costs and lower proved
reserves.
Ceiling test write-down of oil and natural gas
properties: For the third quarter of 2016, we recorded a
non-cash ceiling test write-down of $57.9
million as the book value of our proved oil and natural gas
properties exceeded the ceiling test limitation. The write-down is
primarily the result of decreases in prices for crude oil as the
twelve month moving average has continued to move down under SEC
pricing methodology. For the third quarter of 2015, the
ceiling test write-down was $441.7
million.
General and Administrative Expenses ("G&A"):
G&A decreased $3.8 million, or
23.2% to $12.7 million for the third
quarter of 2016 compared to the third quarter of 2015. The
decrease was primarily due to reclassifying transaction costs
associated with the Exchange Transaction previously recorded in
G&A expense to Gain on exchange of debt. In
addition, decreases in headcount related expense (salaries,
benefits, and contractor expenses) and elimination of certain
employee benefits also contributed to the decrease.
Derivatives: For the third quarter of 2016, we
recorded a $0.4 million net
derivative loss on derivative contracts for crude oil and natural
gas. For the third quarter of 2015, there was a $10.2 million net derivative gain recorded.
A report providing our commodity derivative positions is
posted to our website.
Interest expense: Interest expense incurred was
$23.7 million in the third quarter of
2016, compared to $28.8 million in
the third quarter of 2015. The decrease was primarily
attributable to the Exchange Transaction. Interest expense
was reduced for the Unsecured Senior Notes exchanged on
September 7, 2016 (the close
date). For the new debt issued, undiscounted future cash
flows (principal, PIK and cash interest) are recorded as
liabilities under the accounting guidance for TDR; therefore, no
interest expense was recorded for the new debt for the period of
September 7, 2016 to September 30, 2016. In addition, interest
expense was lower due to lower average borrowings on the revolving
bank credit facility. To the extent interest on the new debt
is paid in cash in future periods it will reduce the liability
recorded in connection with such debt.
Gain on Exchange of Debt: Under the accounting
guidance for TDR, a gain of $124.0
million was recorded related to the Exchange
Transaction. The gain was measured as the difference between
(i) the sum of; the future undiscounted principal and interest
payments of the new debt (the Second Lien PIK Toggle Notes, the
Third Lien PIK Toggle Notes, and the 1.5 Lien Term Loan); the
fair value of the common stock issued; and transaction costs
associated with the Exchange Offer of $18.9
million and (ii) the sum of the principal amount of the
Unsecured Senior Notes exchanged of $710.2
million, adjusted for related debt premium and debt issuance
costs, and the funds received from the issuance of the 1.5 Lien
Term Loan.
Income Tax Benefit: Our income tax benefit for the
third quarter of 2016 and 2015 was $3.8
million and $18.5 million,
respectively. Our annualized effective tax rate for the third
quarter of 2016 was not meaningful primarily due to adjustments
related to the book gain associated with the Exchange
Transaction. For the third quarter 2015, our effective tax
rate was 3.7%, and differs from the federal statutory rate of 35%
primarily due to the valuation allowance recorded for our deferred
tax assets. During the three months ended September 30, 2016 and 2015, we recorded a
valuation allowance decrease of $19.1
million and an increase of $156.2
million, respectively, related to federal and state deferred
tax assets. Deferred tax assets are recorded related to net
operating losses and temporary differences between the book and tax
basis of assets and liabilities expected to generate tax deductions
in future periods. The realization of these assets depends on
recognition of sufficient future taxable income in specific tax
jurisdictions in which those temporary differences or net operating
losses are deductible. In assessing the need for a valuation
allowance on our deferred tax assets, we consider whether it is
more likely than not that some portion or all of them will not be
realized.
During the third quarter of 2016, we received an income tax
refund of $5.6 million that relates
to a net operating loss ("NOL") claim for 2015 carried back to
2005. In the second quarter of 2016 we recorded $52.1 million as non-current income tax
receivables related to our NOL claims for the years 2012, 2013 and
2014 that were carried back to the years 2003, 2004, 2007, 2010 and
2011. These carryback claims are made pursuant to Internal
Revenue Code ("IRC") Section 172(f) which permits certain platform
dismantlement, well abandonment and site clearance costs to be
carried back 10 years.
In connection with the privately negotiated exchange agreement
to exchange a portion of our Unsecured Senior Notes for
new Notes due in 2020 and 2021 and for our common stock, we
realized a tax gain due to the concession extended by our note
holders. This tax gain will be offset by a reduction in our
net operating losses and other deferred tax asset attributes. The
reduction in our deferred tax assets will be fully offset by a
corresponding reduction in our valuation allowance.
Net Income (Loss) & Earnings (Loss) Per Share:
We reported net income for the third quarter of 2016 of
$45.9 million or $0.48 per common share, compared to a reported
net loss of ($477.6) million, or
($6.29) per common share, during the
same period in 2015. Excluding special items (including the
ceiling test write-down of oil and natural gas properties, gain on
exchange of debt, write-off of debt issuance and other
non-operating costs, and an unrealized commodity derivative gain or
loss, net of an applicable federal income tax adjustment), our net
loss for the third quarter of 2016 was ($22.6) million and our loss per common share was
($0.24), compared to the third
quarter of 2015 net loss of ($60.0)
million, or ($0.79) per common
share. Operating results for the third quarter of 2016, excluding
special items, were down primarily due to a $18.8 million decrease in revenues resulting from
a 3.3% decline in our realized sales prices and an 11.2% decline in
production, partially offset by a $7.5
million decrease in LOE, a $3.8
million decrease in G&A and a $45.8 million decrease in DD&A. See the
"Reconciliation of Net Loss to Net 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: Adjusted EBITDA and
Adjusted EBITDA margin are non-GAAP measures and are defined in the
"Non-GAAP Financial Measures" section at the end of this news
release.
Net cash used in operating activities for the first nine months
of 2016 was $9.2 million compared to
net cash provided by operating activities of $134.8 million for the same period in
2015.
Cash flows from operating activities, before changes in working
capital and asset retirement obligations ("ARO") settlements, were
$42.8 million in the first nine
months of 2016, compared to $125.5
million generated over the same period in 2015. Cash
flows declined as revenues were $118.4
million lower in the 2016 period compared to the 2015 period
while operating expenses were $34.2
million lower over the same time period. Asset
retirement obligation settlements totaled $56.2 million in the first nine months of
2016.
Adjusted EBITDA for the third quarter of 2016 was $52.5 million, down from $61.4 million generated over the same period in
2015. Our Adjusted EBITDA margin was 49% for both periods.
For the nine months ended September 30, 2016 our Adjusted EBITDA was
$109.8 million and our Adjusted
EBITDA margin was 39% compared to Adjusted EBITDA of $189.4 million and an Adjusted EBITDA margin of
47% for the same period in 2015.
Liquidity:
On September 7, 2016, we closed on
our new $75 million 1.5 Lien Term
Loan, the proceeds of which were used to pay transaction costs
associated with the Exchange Offer and to repay a portion of the
borrowings outstanding under our revolving bank credit
facility.
At September 30, 2016, our total
liquidity was $222.5 million
consisting of cash balances of $73.4
million and $149.1 million of
availability under our revolving bank credit facility.
2016 Capital Expenditures Update: Our capital
expenditures on an accrual basis for the first nine months of 2016
were $24.1 million ($61.5 million on a cash basis) compared to
$192.8 million ($258.3 million on a cash basis) for the first
nine months of 2015. Thus far in 2016 our capital
expenditures have been directed at completion activities of the
Ewing Bank 954 A-8 well, drilling of the A-18 well at Mahogany,
recompletions at Virgo (VK 823) and Main Pass 69 and a new pipeline
at East Cameron 321. The remainder of the expenditures was
associated with other development activities and
seismic.
Our capital expenditures for 2016 are currently estimated at
$60 million and well below prior year
levels. Our plug and abandonment activities for 2016 are
currently estimated to total $74
million ($90.2 million over
the next twelve months) and are expected to be funded with cash on
hand and cash flow from operating activities.
OPERATIONS UPDATE
Ship Shoal 349 A-18 "Mahogany" (100% WI, operated,
shelf)
We re-initiated drilling operations on the SS349 A-18, which is
expected to reach total target depth of 18,722 feet in the
November/December timeframe. We plan on completing and
bringing the well on line around the end of the year or possibly
early January 2017. The A-18 is
a development well. To date, we have penetrated and logged
pay in two field sands, the results from which are
encouraging. Following the completion of the A-18 well, we
expect to conduct workover activities on several wells to further
enhance field production, likely beginning in early
2017.
Well Recompletions and Workovers
We have recently finished a recompletion of the A-1 well at
Viosca Knoll 823 "Virgo" and the Ewing Bank 954 A-8 well. Both of
these wells are performing better than expected (4,400 Boe per day
gross, 3,200 Boe per day net, production rate on early tests) and
should contribute nicely to fourth quarter production levels.
Bureau of Ocean Energy Management ("BOEM")
Matters: The BOEM requires that lessees demonstrate
financial strength and reliability according to its regulations or
post surety bonds or other acceptable financial assurances, which,
among other things, will insure that such decommissioning
obligations will be satisfied. Prior to 2015, we were
partially exempt from providing such financial assurances.
The significant and sustained decline in crude oil and natural gas
prices, however, has resulted in the Company in 2015 no longer
meeting the relevant financial strength and reliability criteria
for such exemptions set forth in the then current regulations and
procedures of the BOEM. As a result, we were notified by the
BOEM in 2015 that the Company was no longer eligible for any
exemption from providing financial assurances to the
BOEM.
In February and March 2016, we
received several orders from the BOEM ordering the Company to
secure financial assurances in the form of additional security in
the aggregate of $260.8 million, with
amounts specified with respect to certain designated leases, rights
of use and easement and rights of way. We filed appeals with
the Interior Board of Land Appeals ("IBLA") regarding four of the
BOEM orders - specifically the February order requiring the Company
to post a total of $159.8 million in
additional security and three March orders requiring $101.0 million in additional security. The
IBLA, acknowledging that the BOEM and the Company were seeking to
resolve the BOEM orders through settlement discussions, has agreed
to stay the effectiveness of the orders. This is the third
stay that we have received from the IBLA and this latest order
extends the effectiveness to January
31, 2017. We submitted a proposal for a tailored plan
of compliance in May of 2016 in an effort to seek an acceptable
resolution of the orders.
In July 2016, effective
September 12, 2016, the BOEM issued
NTL #2016-N01, related to obligations for decommissioning
activities on the federal OCS, thereby superseding and replacing
the prior applicable NTL which was NTL #2008-N07.
Implementation of this new NTL could result in us having to obtain
additional bonds or other financial assurances and having to post
collateral to obtain such additional bonds or other financial
assurances. In September of 2016, we submitted to the BOEM a
revision of our proposed tailored plan of compliance that we
believe to be consistent with a tailored arrangement allowed under
NTL #2016-N01. Discussions with the BOEM are ongoing and we
are hopeful that we can reach agreement with them on an acceptable
tailored plan.
Fourth Quarter and Full Year 2016 Outlook
Our guidance for the fourth quarter and full year 2016 is
provided in the table below and represents the Company's best
estimate of the range of likely future results.
Guidance could be affected by the factors described below in
"Forward-Looking Statements."
|
|
Fourth
Quarter
|
|
Prior Full
Year
|
|
Revised Full
Year
|
Production
|
|
2016
|
|
2016
|
|
2016
|
Oil and NGLs
(MMBbls)
|
|
1.9 - 2.1
|
|
8.5 - 9.3
|
|
8.3 - 9.2
|
Natural gas
(Bcf)
|
|
9.5 - 10.5
|
|
37.9 -
41.9
|
|
37.7 -
41.6
|
Total
(Bcf)
|
|
21.1 -
23.3
|
|
88.8 -
98.2
|
|
87.6 -
96.8
|
Total
(MMBoe)
|
|
3.5 - 3.9
|
|
14.6 -
16.4
|
|
14.6 -
16.1
|
|
|
|
|
|
|
|
Operating
Exenses
|
|
Fourth
Quarter
|
|
Prior Full
Year
|
|
Revised Full
Year
|
($ in
million)
|
|
2016
|
|
2016
|
|
2016
|
Lease operating
expenses
|
|
$40 - 45
|
|
$166 -
$184
|
|
$153 -
$169
|
Gathering,
transportation & production taxes
|
|
$6 - $7
|
|
$22 - $24
|
|
$23 - $26
|
General and
administrative
|
|
$15 - $17
|
|
$61 - $68
|
|
$58 - $64
|
Income tax rate
benefit
|
|
n/m
|
|
5.4%
|
|
14.9%
|
Conference Call Information: W&T will hold a
conference call to discuss our financial and operational results on
Thursday, November 3, 2016, at
8:30 a.m. Eastern 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. A
replay of the conference call will be available approximately two
hours after the end of the call until November 10, 2016 and may be accessed by calling
201-612-7415 and using the passcode 13648354#.
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 54 fields in
federal and state waters (50 producing and four fields capable of
producing) and has under lease approximately 750,000 gross acres,
including approximately 450,000 gross acres on the Gulf of Mexico
Shelf and approximately 300,000 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, 2015
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,
|
|
|
2016
|
|
|
2015
|
|
2016
|
|
|
2015
|
|
|
(In thousands,
except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
$
|
107,403
|
|
|
$
|
126,228
|
|
$
|
284,773
|
|
|
$
|
403,201
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating costs and
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lease operating
expenses
|
|
|
37,520
|
|
|
|
45,039
|
|
|
118,611
|
|
|
|
143,500
|
Gathering,
transportation costs and production taxes
|
|
|
5,643
|
|
|
|
4,461
|
|
|
18,029
|
|
|
|
15,715
|
Depreciation,
depletion, amortization and accretion
|
|
|
51,500
|
|
|
|
97,329
|
|
|
172,726
|
|
|
|
326,138
|
Ceiling test
write-down of oil and natural gas properties
|
|
|
57,912
|
|
|
|
441,688
|
|
|
279,063
|
|
|
|
954,850
|
General and
administrative expenses
|
|
|
12,692
|
|
|
|
16,515
|
|
|
45,370
|
|
|
|
57,038
|
Derivative (gain)
loss
|
|
|
412
|
|
|
|
(10,231)
|
|
|
2,861
|
|
|
|
(9,153)
|
Total costs and
expenses
|
|
|
165,679
|
|
|
|
594,801
|
|
|
636,660
|
|
|
|
1,488,088
|
Operating
loss
|
|
|
(58,276)
|
|
|
|
(468,573)
|
|
|
(351,887)
|
|
|
|
(1,084,887)
|
Interest
expense:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Incurred
|
|
|
23,693
|
|
|
|
28,754
|
|
|
81,280
|
|
|
|
77,816
|
Capitalized
|
|
|
(75)
|
|
|
|
(2,203)
|
|
|
(520)
|
|
|
|
(6,010)
|
Gain on exchange of
debt
|
|
|
123,960
|
|
|
|
-
|
|
|
123,960
|
|
|
|
-
|
Other (income)
expense, net
|
|
|
(73)
|
|
|
|
964
|
|
|
1,209
|
|
|
|
2,647
|
Income (loss) before
income tax benefit
|
|
|
42,139
|
|
|
|
(496,088)
|
|
|
(309,896)
|
|
|
|
(1,159,340)
|
Income tax
benefit
|
|
|
(3,789)
|
|
|
|
(18,520)
|
|
|
(44,393)
|
|
|
|
(166,228)
|
Net income
(loss)
|
|
$
|
45,928
|
|
|
$
|
(477,568)
|
|
$
|
(265,503)
|
|
|
$
|
(993,112)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted
earnings (loss) per common share
|
|
$
|
0.48
|
|
|
$
|
(6.29)
|
|
$
|
(3.25)
|
|
|
$
|
(13.08)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
common shares outstanding
|
|
|
92,243
|
|
|
|
75,932
|
|
|
81,748
|
|
|
|
75,900
|
W&T OFFSHORE,
INC. AND SUBSIDIARIES
|
Condensed
Operating Data
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
|
|
|
|
September
30,
|
|
|
|
|
Variance
|
|
|
2016
|
|
|
2015
|
|
Variance
|
|
Percentage(2)
|
Net sales
volumes:
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil
(MBbls)
|
|
|
1,791
|
|
|
|
1,973
|
|
|
(182)
|
|
-9.2%
|
NGL
(MBbls)
|
|
|
372
|
|
|
|
389
|
|
|
(17)
|
|
-4.4%
|
Oil and NGLs
(MBbls)
|
|
|
2,163
|
|
|
|
2,362
|
|
|
(199)
|
|
-8.4%
|
Natural gas
(MMcf)
|
|
|
9,935
|
|
|
|
11,635
|
|
|
(1,700)
|
|
-14.6%
|
Total oil and natural
gas (MBoe) (1)
|
|
|
3,819
|
|
|
|
4,302
|
|
|
(483)
|
|
-11.2%
|
Total oil and natural
gas (MMcfe) (1)
|
|
|
22,912
|
|
|
|
25,810
|
|
|
(2,898)
|
|
-11.2%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average daily
equivalent sales (MBoe/d)
|
|
|
41.5
|
|
|
|
46.8
|
|
|
(5.3)
|
|
-11.4%
|
Average daily
equivalent sales (MMcfe/d)
|
|
|
249.0
|
|
|
|
280.5
|
|
|
(31.5)
|
|
-11.2%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average realized
sales prices:
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil
($/Bbl)
|
|
$
|
39.62
|
|
|
$
|
43.85
|
|
$
|
(4.23)
|
|
-9.6%
|
NGLs
($/Bbl)
|
|
|
18.02
|
|
|
|
16.74
|
|
|
1.28
|
|
7.6%
|
Oil and NGLs
($/Bbl)
|
|
|
35.91
|
|
|
|
39.38
|
|
|
(3.47)
|
|
-8.8%
|
Natural gas
($/Mcf)
|
|
|
2.93
|
|
|
|
2.69
|
|
|
0.24
|
|
8.9%
|
Barrel of oil
equivalent ($/Boe)
|
|
|
27.97
|
|
|
|
28.92
|
|
|
(0.95)
|
|
-3.3%
|
Natural gas
equivalent ($/Mcfe)
|
|
|
4.66
|
|
|
|
4.82
|
|
|
(0.16)
|
|
-3.3%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average per Boe
($/Boe):
|
|
|
|
|
|
|
|
|
|
|
|
|
Lease operating
expenses
|
|
$
|
9.82
|
|
|
$
|
10.47
|
|
$
|
(0.65)
|
|
-6.2%
|
Gathering and
transportation costs and production taxes
|
|
|
1.48
|
|
|
|
1.04
|
|
|
0.44
|
|
42.3%
|
Depreciation,
depletion, amortization and accretion
|
|
|
13.49
|
|
|
|
22.62
|
|
|
(9.13)
|
|
-40.4%
|
General and
administrative expenses
|
|
|
3.32
|
|
|
|
3.84
|
|
|
(0.52)
|
|
-13.5%
|
Adjusted
EBITDA
|
|
|
13.74
|
|
|
|
14.27
|
|
|
(0.53)
|
|
-3.7%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average per Mcfe
($/Mcfe):
|
|
|
|
|
|
|
|
|
|
|
|
|
Lease operating
expenses
|
|
$
|
1.64
|
|
|
$
|
1.74
|
|
$
|
(0.10)
|
|
-5.7%
|
Gathering and
transportation costs and production taxes
|
|
|
0.25
|
|
|
|
0.17
|
|
|
0.08
|
|
47.1%
|
Depreciation,
depletion, amortization and accretion
|
|
|
2.25
|
|
|
|
3.77
|
|
|
(1.52)
|
|
-40.3%
|
General and
administrative expenses
|
|
|
0.55
|
|
|
|
0.64
|
|
|
(0.09)
|
|
-14.1%
|
Adjusted
EBITDA
|
|
|
2.29
|
|
|
|
2.38
|
|
|
(0.09)
|
|
-3.8%
|
(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
|
|
|
2016
|
|
|
2015
|
|
Variance
|
|
Percentage(2)
|
Net sales
volumes:
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil
(MBbls)
|
|
|
5,532
|
|
|
|
5,776
|
|
|
(244)
|
|
-4.2%
|
NGL
(MBbls)
|
|
|
1,180
|
|
|
|
1,241
|
|
|
(61)
|
|
-4.9%
|
Oil and NGLs
(MBbls)
|
|
|
6,712
|
|
|
|
7,017
|
|
|
(305)
|
|
-4.3%
|
Natural gas
(MMcf)
|
|
|
29,696
|
|
|
|
35,470
|
|
|
(5,774)
|
|
-16.3%
|
Total oil and natural
gas (MBoe) (1)
|
|
|
11,661
|
|
|
|
12,928
|
|
|
(1,267)
|
|
-9.8%
|
Total oil and natural
gas (MMcfe) (1)
|
|
|
69,967
|
|
|
|
77,569
|
|
|
(7,602)
|
|
-9.8%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average daily
equivalent sales (MBoe/d)
|
|
|
42.6
|
|
|
|
47.4
|
|
|
(4.8)
|
|
-10.1%
|
Average daily
equivalent sales (MMcfe/d)
|
|
|
255.4
|
|
|
|
284.1
|
|
|
(28.7)
|
|
-10.1%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average realized
sales prices:
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil
($/Bbl)
|
|
$
|
35.01
|
|
|
$
|
47.81
|
|
$
|
(12.80)
|
|
-26.8%
|
NGLs
($/Bbl)
|
|
|
15.85
|
|
|
|
17.57
|
|
|
(1.72)
|
|
-9.8%
|
Oil and NGLs
($/Bbl)
|
|
|
31.64
|
|
|
|
42.46
|
|
|
(10.82)
|
|
-25.5%
|
Natural gas
($/Mcf)
|
|
|
2.33
|
|
|
|
2.82
|
|
|
(0.49)
|
|
-17.4%
|
Barrel of oil
equivalent ($/Boe)
|
|
|
24.15
|
|
|
|
30.78
|
|
|
(6.63)
|
|
-21.5%
|
Natural gas
equivalent ($/Mcfe)
|
|
|
4.02
|
|
|
|
5.13
|
|
|
(1.11)
|
|
-21.6%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average per Boe
($/Boe):
|
|
|
|
|
|
|
|
|
|
|
|
|
Lease operating
expenses
|
|
$
|
10.17
|
|
|
$
|
11.10
|
|
$
|
(0.93)
|
|
-8.4%
|
Gathering and
transportation costs and production taxes
|
|
|
1.55
|
|
|
|
1.22
|
|
|
0.33
|
|
27.0%
|
Depreciation,
depletion, amortization and accretion
|
|
|
14.81
|
|
|
|
25.23
|
|
|
(10.42)
|
|
-41.3%
|
General and
administrative expenses
|
|
|
3.89
|
|
|
|
4.41
|
|
|
(0.52)
|
|
-11.8%
|
Adjusted
EBITDA
|
|
|
9.42
|
|
|
|
14.65
|
|
|
(5.23)
|
|
-35.7%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average per Mcfe
($/Mcfe):
|
|
|
|
|
|
|
|
|
|
|
|
|
Lease operating
expenses
|
|
$
|
1.70
|
|
|
$
|
1.85
|
|
$
|
(0.15)
|
|
-8.1%
|
Gathering and
transportation costs and production taxes
|
|
|
0.26
|
|
|
|
0.20
|
|
|
0.06
|
|
30.0%
|
Depreciation,
depletion, amortization and accretion
|
|
|
2.47
|
|
|
|
4.20
|
|
|
(1.73)
|
|
-41.2%
|
General and
administrative expenses
|
|
|
0.65
|
|
|
|
0.74
|
|
|
(0.09)
|
|
-12.2%
|
Adjusted
EBITDA
|
|
|
1.57
|
|
|
|
2.44
|
|
|
(0.87)
|
|
-35.7%
|
(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,
|
|
|
2016
|
|
|
2015
|
|
|
(In thousands,
except
|
|
|
share
data)
|
Assets
|
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
73,351
|
|
|
$
|
85,414
|
Receivables:
|
|
|
|
|
|
|
|
Oil and
natural gas sales
|
|
|
35,772
|
|
|
|
35,005
|
Joint
interest and other
|
|
|
17,688
|
|
|
|
22,012
|
Total
receivables
|
|
|
53,460
|
|
|
|
57,017
|
Prepaid expenses and
other assets
|
|
|
16,145
|
|
|
|
26,879
|
Total current
assets
|
|
|
142,956
|
|
|
|
169,310
|
Property and
equipment – at cost:
|
|
|
|
|
|
|
|
Oil and natural gas
properties and equipment (full cost method, of which $0 at
September 30, 2016 and $18,595 at
December 31, 2015 were excluded from amortization)
|
|
|
7,937,338
|
|
|
|
7,902,494
|
Furniture, fixtures
and other
|
|
|
20,898
|
|
|
|
20,802
|
Total property and
equipment
|
|
|
7,958,236
|
|
|
|
7,923,296
|
Less accumulated
depreciation, depletion and amortization
|
|
|
7,371,677
|
|
|
|
6,933,247
|
Net property and
equipment
|
|
|
586,559
|
|
|
|
990,049
|
Deferred income
taxes
|
|
|
12,395
|
|
|
|
27,595
|
Restricted deposits
for asset retirement obligations
|
|
|
26,767
|
|
|
|
15,606
|
Income tax
receivables
|
|
|
52,097
|
|
|
|
-
|
Other
assets
|
|
|
11,823
|
|
|
|
5,462
|
Total
assets
|
|
$
|
832,597
|
|
|
$
|
1,208,022
|
|
|
|
|
|
|
|
|
Liabilities and
Shareholders' Deficit
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
|
Accounts
payable
|
|
$
|
83,309
|
|
|
$
|
109,797
|
Undistributed oil and
natural gas proceeds
|
|
|
21,239
|
|
|
|
21,439
|
Asset retirement
obligations
|
|
|
90,150
|
|
|
|
84,335
|
Long-term
debt
|
|
|
8,763
|
|
|
|
-
|
Accrued
liabilities
|
|
|
19,573
|
|
|
|
11,922
|
Total current
liabilities
|
|
|
223,034
|
|
|
|
227,493
|
Long-term debt, less
current portion
|
|
|
1,014,221
|
|
|
|
1,196,855
|
Asset retirement
obligations, less current portion
|
|
|
256,656
|
|
|
|
293,987
|
Other
liabilities
|
|
|
16,683
|
|
|
|
16,178
|
Commitments and
contingencies
|
|
|
-
|
|
|
|
-
|
Shareholders' equity
(deficit):
|
|
|
|
|
|
|
|
Common stock,
$0.00001 par value; 200,000,000 shares authorized;
139,951,997 issued and 137,082,824
outstanding at September 30, 2016; 79,375,662 issued
and 75,506,489 outstanding at
December 31, 2015
|
|
|
1
|
|
|
|
1
|
Additional paid-in
capital
|
|
|
537,496
|
|
|
|
423,499
|
Retained earnings
(deficit)
|
|
|
(1,191,327)
|
|
|
|
(925,824)
|
Treasury stock, at
cost
|
|
|
(24,167)
|
|
|
|
(24,167)
|
Total shareholders'
deficit
|
|
|
(677,997)
|
|
|
|
(526,491)
|
Total liabilities and
shareholders' deficit
|
|
$
|
832,597
|
|
|
$
|
1,208,022
|
W&T OFFSHORE,
INC. AND SUBSIDIARIES
|
Long-Term Debt and
Debt Exchange
|
(Unaudited)
|
($ in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June
30,
|
|
December
31,
|
|
|
September 30,
2016
|
|
2016
|
|
2015
|
|
|
|
|
PIK
Payable/
|
|
|
|
|
|
|
|
|
|
|
Interest
Payable/
|
|
Carrying
|
|
Principal/
|
|
Principal/
|
|
|
Principal
|
|
Other
|
|
Value
|
|
Other
*
|
|
Other
*
|
Revolving Bank Credit
Facility,
|
|
|
|
|
|
|
|
|
|
|
due November 2018
|
|
$
-
|
|
$
-
|
|
$
-
|
|
$
148,000
|
|
$
-
|
|
|
|
|
|
|
|
|
|
|
|
11.00 % 1.5 Lien Term
Loan,
|
|
|
|
|
|
|
|
|
|
|
due November 2019
|
|
75,000
|
|
26,393
|
|
101,393
|
|
-
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
9.00% Second Lien
Term Loan,
|
|
|
|
|
|
|
|
|
|
|
due May 2020
|
|
300,000
|
|
-
|
|
300,000
|
|
300,000
|
|
300,000
|
|
|
|
|
|
|
|
|
|
|
|
9.00%/10.75% Second
Lien PIK Toggle Notes,
|
|
|
|
|
|
|
|
|
|
|
due May 2020
|
|
159,763
|
|
64,142
|
|
223,905
|
|
-
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
8.50%/10.00% Third
Lien PIK Toggle Notes,
|
|
|
|
|
|
|
|
|
|
|
due June 2021
|
|
142,031
|
|
71,416
|
|
213,447
|
|
-
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
8.50% Unsecured
Senior Notes,
|
|
|
|
|
|
|
|
|
|
|
due June 2019
|
|
189,829
|
|
-
|
|
189,829
|
|
900,000
|
|
900,000
|
Subtotal
|
|
866,623
|
|
161,951
|
|
1,028,574
|
|
1,348,000
|
|
1,200,000
|
|
|
|
|
|
|
|
|
|
|
|
Debt premium,
discount, issuance costs,
|
|
|
|
|
|
|
|
|
|
|
net of
amortization
|
|
-
|
|
(5,590)
|
|
(5,590)
|
|
(2,949)
|
|
(3,145)
|
Total long-term debt
|
|
866,623
|
|
156,361
|
|
1,022,984
|
|
1,345,051
|
|
1,196,855
|
Current maturities of
long-term debt
|
|
-
|
|
8,763
|
|
8,763
|
|
-
|
|
-
|
Long
term debt, less current maturities
|
|
$ 866,623
|
|
$
147,598
|
|
$
1,014,221
|
|
$
1,345,051
|
|
$
1,196,855
|
* Amounts also
equal carrying value of these dates.
|
W&T OFFSHORE,
INC. AND SUBSIDIARIES
|
Condensed
Consolidated Statements of Cash Flows
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months
Ended
|
|
|
|
September
30,
|
|
|
|
2016
|
|
|
2015
|
|
|
|
(In
thousands)
|
|
|
|
|
|
Operating
activities:
|
|
|
|
|
|
|
|
|
Net loss
|
|
$
|
(265,503)
|
|
|
$
|
(993,112)
|
|
Adjustments to
reconcile net loss to net cash provided by (used in) operating
activities:
|
|
|
|
|
|
|
|
|
Depreciation,
depletion, amortization and accretion
|
|
|
172,726
|
|
|
|
326,138
|
|
Ceiling test
write-down of oil and natural gas properties
|
|
|
279,063
|
|
|
|
954,850
|
|
Gain on exchange of
debt
|
|
|
(123,960)
|
|
|
|
-
|
|
Debt issuance costs
write-off/amortization of debt items
|
|
|
2,135
|
|
|
|
2,862
|
|
Share-based
compensation
|
|
|
7,642
|
|
|
|
8,313
|
|
Derivative (gain)
loss
|
|
|
2,861
|
|
|
|
(9,153)
|
|
Cash receipts on
derivative settlements
|
|
|
4,746
|
|
|
|
2,139
|
|
Deferred income
taxes
|
|
|
15,484
|
|
|
|
(166,258)
|
|
Asset retirement
obligation settlements
|
|
|
(56,167)
|
|
|
|
(25,515)
|
|
Changes in operating
assets and liabilities
|
|
|
(48,195)
|
|
|
|
34,529
|
|
Net cash provided by
(used in) operating activities
|
|
|
(9,168)
|
|
|
|
134,793
|
|
|
|
|
|
|
|
|
|
|
Investing
activities:
|
|
|
|
|
|
|
|
|
Investment in oil and
natural gas properties and equipment
|
|
|
(24,062)
|
|
|
|
(192,811)
|
|
Changes in operating
assets and liabilities associated with investing
activities
|
|
|
(37,400)
|
|
|
|
(65,463)
|
|
Proceeds from sales
of assets
|
|
|
1,500
|
|
|
|
-
|
|
Purchases of
furniture, fixtures and other
|
|
|
(96)
|
|
|
|
(1,185)
|
|
Net cash used in
investing activities
|
|
|
(60,058)
|
|
|
|
(259,459)
|
|
|
|
|
|
|
|
|
|
|
Financing
activities:
|
|
|
|
|
|
|
|
|
Borrowings of
long-term debt - revolving bank credit facility
|
|
|
340,000
|
|
|
|
263,000
|
|
Repayments of
long-term debt - revolving bank credit facility
|
|
|
(340,000)
|
|
|
|
(445,000)
|
|
Issuance of Second
Lien Term Loan
|
|
|
-
|
|
|
|
297,000
|
|
Issuance of 1.5 Lien
Term Loan
|
|
|
75,000
|
|
|
|
-
|
|
Debt
exchange/issuance costs
|
|
|
(17,920)
|
|
|
|
(6,591)
|
|
Other
|
|
|
83
|
|
|
|
54
|
|
Net cash provided by
financing activities
|
|
|
57,163
|
|
|
|
108,463
|
|
Decrease in cash and
cash equivalents
|
|
|
(12,063)
|
|
|
|
(16,203)
|
|
Cash and cash
equivalents, beginning of period
|
|
|
85,414
|
|
|
|
23,666
|
|
Cash and cash
equivalents, end of period
|
|
$
|
73,351
|
|
|
$
|
7,463
|
|
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
(Loss) Excluding Special Items
"Net Loss Excluding Special Items" does not include the
unrealized commodity derivative (gain) loss, write-off of debt
issuance and other non-operating costs, a contingent assessment
provision, ceiling test write-down of oil and natural gas
properties, gain on exchange of debt and associated income tax
adjustments. Net 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,
|
|
|
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
|
|
|
(In thousands,
except per share amounts)
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
|
$
|
45,928
|
|
|
$
|
(477,568)
|
|
|
$
|
(265,503)
|
|
|
$
|
(993,112)
|
|
Unrealized commodity
derivative (gain) loss
|
|
|
412
|
|
|
|
(8,092)
|
|
|
|
7,606
|
|
|
|
(7,014)
|
|
Write off of
debt issuance and other non operating costs
|
|
|
928
|
|
|
|
-
|
|
|
|
3,699
|
|
|
|
1,973
|
|
Contingent assessment
provision
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1,000
|
|
Ceiling test
write-down of oil and natural gas properties
|
|
|
57,912
|
|
|
|
441,688
|
|
|
|
279,063
|
|
|
|
954,850
|
|
Gain on exchange of
debt
|
|
|
(123,960)
|
|
|
|
-
|
|
|
|
(123,960)
|
|
|
|
-
|
|
Income tax
adjustment
|
|
|
(3,789)
|
|
|
|
(16,043)
|
|
|
|
(23,796)
|
|
|
|
(135,966)
|
|
Net loss excluding
special items
|
|
$
|
(22,569)
|
|
|
$
|
(60,015)
|
|
|
$
|
(122,891)
|
|
|
$
|
(178,269)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted
loss per common share, excluding special items
|
|
$
|
(0.24)
|
|
|
$
|
(0.79)
|
|
|
$
|
(1.50)
|
|
|
$
|
(2.35)
|
|
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, write off of debt issuance and
other non-operating costs, gain on exchange of debt, and a
contingent assessment provision. 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
consolidated net loss to consolidated EBITDA and Adjusted EBITDA
along with our Adjusted EBITDA margin.
|
|
Three Months
Ended
|
|
|
Nine Months
Ended
|
|
|
|
September
30,
|
|
September
30,
|
|
|
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
|
|
|
(In
thousands)
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
|
$
|
45,928
|
|
|
$
|
(477,568)
|
|
|
$
|
(265,503)
|
|
|
$
|
(993,112)
|
|
Income tax
benefit
|
|
|
(3,789)
|
|
|
|
(18,520)
|
|
|
|
(44,393)
|
|
|
|
(166,228)
|
|
Net interest
expense
|
|
|
23,546
|
|
|
|
26,535
|
|
|
|
80,602
|
|
|
|
71,787
|
|
Depreciation,
depletion, amortization and accretion
|
|
|
51,500
|
|
|
|
97,329
|
|
|
|
172,726
|
|
|
|
326,138
|
|
Ceiling test
write-down of oil and natural gas properties
|
|
|
57,912
|
|
|
|
441,688
|
|
|
|
279,063
|
|
|
|
954,850
|
|
EBITDA
|
|
|
175,097
|
|
|
|
69,464
|
|
|
|
222,495
|
|
|
|
193,435
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized commodity
derivative (gain) loss
|
|
|
412
|
|
|
|
(8,092)
|
|
|
|
7,606
|
|
|
|
(7,014)
|
|
Write off of
debt issuance and other non operating costs
|
|
|
928
|
|
|
|
-
|
|
|
|
3,699
|
|
|
|
1,973
|
|
Gain on exchange of
debt
|
|
|
(123,960)
|
|
|
|
-
|
|
|
|
(123,960)
|
|
|
|
-
|
|
Contingent assessment
provision
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1,000
|
|
Adjusted
EBITDA
|
|
$
|
52,477
|
|
|
$
|
61,372
|
|
|
$
|
109,840
|
|
|
$
|
189,394
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
Margin
|
|
|
49%
|
|
|
|
49%
|
|
|
|
39%
|
|
|
|
47%
|
|
CONTACT:
|
Lisa
Elliott
|
Danny
Gibbons
|
|
Dennard Lascar
Associates
|
SVP &
CFO
|
|
lelliott@dennardlascar.com
|
investorrelations@wtoffshore.com
|
|
713-529-6600
|
713-624-7326
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/wt-offshore-announces-third-quarter-2016-operational-and-financial-results-along-with-fourth-quarter-and-full-year-2016-production-and-expense-guidance-300356208.html
SOURCE W&T Offshore, Inc.