HOUSTON, Aug. 1, 2018 /PRNewswire/ -- W&T
Offshore, Inc. (NYSE: WTI) today reported its second quarter 2018
operational and financial results and third quarter and full year
2018 production and expense guidance. Some of the key highlights
for the second quarter included:
- Mid-Year 2018 SEC proved reserves were 78.0 million Boe, up 5%
from year-end 2017 SEC proved reserves, primarily due to upward
revisions of previous estimates of 12.7 million Boe. The increase
in proved reserves was more than sufficient to replace production
and a conveyance of proved undeveloped reserves.
- The present value of our reported SEC proved reserves,
discounted at 10% ("PV-10"), was $1.3
billion, a 30% increase from year-end 2017, primarily due to
upward revisions of previous estimates and higher average
prices.
- Production for the second quarter of 2018 averaged 37,571
barrels of oil equivalent ("Boe") per day (or 3.4 million Boe for
the quarter), 60.1% of which was oil and natural gas liquids
("NGLs"). Production was impacted by well maintenance, weather,
pipeline outages and platform maintenance that collectively
resulted in deferred production of approximately 4,600 Boe per day.
Our second quarter production was 2.7% higher than first quarter of
2018.
- Revenues for the second quarter of 2018 were $149.6 million, up $26.3
million, or 21.3% compared to the second quarter of 2017.
Oil and NGLs sales made up 83.8% of revenues, compared to 75.1% in
the second quarter of 2017. Our realized crude oil price was
$67.09 per barrel, up 50.6% from
second quarter 2017.
- Operating income for the second quarter of 2018 was
$48.5 million, an increase of 47.4%
or $15.6 million, over the second
quarter of 2017.
- Net income for the second quarter of 2018 was $36.1 million, or $0.25 per share compared to net income of
$33.3 million, or $0.23 per share in the second quarter of 2017.
Net income for the second quarter of 2018 included $0.1 million of income tax expense, whereas net
income for the second quarter of 2017 included an income tax
benefit of $9.0 million. Excluding
special items, adjusted net income for the second quarter of 2018
was $41.9 million and earnings were
$0.29 per share.
- Cash flow from operating activities for the first six months of
2018 was $115.2 million, increasing
over 75% from the first six months of 2017. Adjusted EBITDA for the
second quarter of 2018 was $93.3
million, up $20.7 million, or
28.5% compared to the second quarter of 2017. Our Adjusted EBITDA
margin was 62% for the second quarter of 2018, up from 59% in
second quarter of 2017. For the first six months of 2018 our
Adjusted EBITDA was $170.5 million,
up $32.1 million or 23.2% over the
same period in 2017. (See definitions and reconciliations of
non-GAAP measures to GAAP measures at the end of this news
release.)
- Closed on the previously announced joint venture drilling
program with private investors ("the JV Drilling Program"), in
June 2018 through Monza Energy LLC.
In total, the JV Drilling Program raised $361.4 million of equity from outside investors
and W&T for the development of 14 pre-identified projects in
the GOM, four of which are underway, or on production.
- Acquired a 9.375% non-operated working interest in the
Heidelberg Field, as previously announced.
Tracy W. Krohn, W&T
Offshore's Chairman and Chief Executive Officer, stated, "We had an
excellent second quarter, with a high level of cash flow generation
and continued drilling success. During the quarter our
production volumes, which came in at the mid-range of our guidance,
benefited from a 39.5% increase in our realized sales price, while
our lease operating costs were significantly lower than
anticipated, driving a 47.4% increase in operating income compared
to the same period last year.
"Our Mahogany and Virgo Fields continue to add substantial value
with additional successful wells in both fields this year.
Earlier in the year we completed and began producing the A-17 well
at Mahogany and just recently completed and brought on line the A-5
sidetrack well that tested at about 2,700 Boe per day gross.
At our Virgo Field we completed and brought on line the A-10 ST
well and are currently drilling the A-12 well. At our Ewing
Bank 910 field, we are currently drilling the ST320 A-2 well and
expect to reach total depth this quarter and if successful,
commence completion operations shortly thereafter. Each of
these fields has existing infrastructure that allow for quick cash
flow generation, which substantially shortens our payback and
accordingly increases our rates of return.
"Funding for the JV Drilling Program was closed in June which
raised $361.4 million from outside
investors and W&T, which is expected to cover the cost to drill
and complete 14 identified projects. The program is off to an
excellent start with three successful wells drilled so far and two
wells currently underway. The JV Drilling Program is helping
us maximize our liquidity, while increasing our cash flow.
Our capital expenditures for the first six months of 2018 were
$31.8 million and our Adjusted EBITDA
was $170.5 million. The JV
Drilling Program was a key aspect of our strategy to increase our
free cash flow, strengthen our balance sheet and put ourselves in
an excellent position to manage our debt obligations as well as end
the year with a much improved financial position," concluded Mr.
Krohn.
Production, Prices and Revenues: Production for the
second quarter of 2018 was 3.4 million Boe, compared to the second
quarter 2017 of 3.9 million Boe. Second quarter 2018
production was comprised of 1.7 million barrels of oil, 0.3 million
barrels of NGLs and 8.2 billion cubic feet ("Bcf") of natural
gas. Oil and NGLs production comprised 60.1% of total
production in the second quarter of 2018 compared to 58.0% of total
production in the second quarter of 2017.
Production for the second quarter of 2018 was below the 2017
level partially due to natural production decline, as well as, well
maintenance, weather, pipeline outages, and platform maintenance
that collectively resulted in deferred production of approximately
4,600 Boe per day, compared to 3,400 Boe per day in the second
quarter of 2017.
For the second quarter of 2018, production increases came from
our newly acquired 9.375% non-operated working interest in the
Heidelberg field, our Ship Shoal 300 field (with the completion of
the SS300 B-5ST in November 2017),
our Mahogany field and our Virgo field. These gains were
offset by production decreases primarily due to natural production
declines and production deferrals discussed above.
For the second quarter of 2018, our realized crude oil sales
price was $67.09 per barrel (a 50.6%
increase over the second quarter of 2017), our realized NGL sales
price was $27.61 per barrel and our
realized natural gas sales price was $2.81 per Mcf. Our combined average
realized sales price was $43.38 per
Boe, which represents a 39.5% increase over the $31.10 per Boe sales price that we realized in
the second quarter of 2017.
Revenues for the second quarter of 2018 increased 21.3% to
$149.6 million compared to
$123.3 million in the second quarter
of 2017. The increase was due to a 39.5% increase in our
realized commodity sales price per Boe, partially offset by a 12.8%
decrease in production volumes. We sold 37,571 Boe per day at
an average realized sales price of $43.38 per Boe compared to 43,084 Boe per day at
an average realized sales price of $31.10 per Boe in the second quarter of
2017.
Lease Operating Expenses: Lease operating expense
("LOE"), which includes base lease operating expenses, insurance
premiums, workovers and facilities maintenance, was $35.6 million in the second quarter of 2018
compared to $31.5 million in the
second quarter of 2017. On a component basis, base lease
operating expenses were $29.9
million, insurance premiums were $2.8
million, workovers were $1.6
million and facilities maintenance was $1.3 million. Base LOE was up
$3.1 million from the second quarter
of 2017, primarily due to the addition of the Heidelberg field,
lower production handling fees at one of our properties and an
increase in cost at some of our non-operated properties.
Facilities maintenance increased $0.7
million primarily for pipeline and compressor repairs.
Insurance premiums were up $0.5
million due to better coverage on our energy package while
workover expenses decreased $0.2
million.
Depreciation, depletion, amortization and accretion
("DD&A"): DD&A, including accretion for asset
retirement obligations ("ARO"), was $11.63 per Boe for the second quarter of 2018
compared to $10.29 per Boe for the
second quarter of 2017. On a nominal basis, DD&A was
$39.8 million for the second quarter
of 2018, which was down from $40.4
million in the second quarter of 2017 due to lower
production volumes.
General and Administrative Expenses ("G&A"):
G&A was $14.2 million for the
second quarter of 2018, decreasing 13.7% compared to $16.5 million in the second quarter of
2017. The decrease was primarily due to declines in
share-based compensation and legal costs.
Derivative (gain) loss: In the second quarter
of 2018 we recorded a loss of $6.2
million on our outstanding crude oil commodity derivative
contracts, $5.1 million of which was
unrealized. This compared to a gain of $3.7 million in the second quarter of 2017 on the
then outstanding crude oil derivative contracts that expired at the
end of 2017. Approximately $2.2
million of that gain was unrealized at the end of the second
quarter of 2017. A list of our currently outstanding
derivative positions may be found on our website at
www.wtoffshore.com in the investor relations section under "other
reports" tab.
Interest expense: Interest expense was $12.1 million in the second quarter of 2018,
compared to $11.4 million in the
second quarter of 2017. The increase represents an interest
accrual on a potential settlement of a royalty claim.
Income Tax: We recorded income tax expense of
$0.1 million in the second quarter of
2018 on pre-tax income of $36.2
million, compared to an income tax benefit of $9.0 million on pre-tax income of $24.3 million in the second quarter of 2017. Our
current full-year forecast for 2018 has a net operating loss for
tax purposes; therefore, no current tax expense was recorded and
any deferred tax expense was offset dollar for dollar with the
valuation allowance. Minor adjustments were recorded to tax
expense for an uncertain tax position.
The balance sheet at June 30,
2018, reflects current income tax receivables of
$65.2 million, which relates to our
net operating loss claims for plug and abandonment work that
qualifies as a specified liability loss for tax purposes, allowing
for net operating losses to be carried back to prior
years.
Net Income & Earnings Per Share: We
reported net income for the second quarter of 2018 of $36.1 million, or $0.25 per common share. Excluding special
items, our adjusted net income was $41.9
million, or $0.29 per
share. For the second quarter of 2017, we reported net income
of $33.3 million, or $0.23 per common share; excluding special items,
adjusted net income for the second quarter of 2017 was $31.1 million, or $0.22 per share. (See the "Reconciliation
of Net Income to Net Income 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 for the six months ended June 30, 2018, was $115.2
million compared to $65.6
million for the six months ended June
30, 2017. The increase is primarily due to higher
realized prices for crude oil and NGLs and lower spending on plug
and abandonment activities.
Cash flows from operating activities before changes in working
capital were $150.4 million in the
first half of 2018, compared to $129.2
million for the same period in 2017 due to substantially
better operating results.
Adjusted EBITDA for the second quarter of 2018 was $93.3 million and our Adjusted EBITDA margin was
62% compared to Adjusted EBITDA of $72.6
million and an Adjusted EBITDA margin of 59% for the second
quarter of 2017. 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 June 30,
2018, our total liquidity was $269.7
million, consisting of an unrestricted cash balance of
$129.4 million and $140.3 million of availability under our
$150 million revolving bank credit
facility. By July 30, 2018, our
cash balance had grown to $190.8
million and our total liquidity was $331.1 million.
Capital Expenditures: Our capital expenditures for
oil and gas properties on an accrual basis for the first six months
of 2018 were $31.8 million, compared
to $43.8 million for the 2017
period. The 2018 period reflects a net reimbursement from
Monza Energy LLC of $21.1 million for
wells drilled or being drilled and that were contributed by W&T
to Monza. During the six months ended June 30, 2018, we completed the A-17 well at
Mahogany, which began producing during March
2018, and we completed the Viosca Knoll 823 ("Virgo") A-10
ST well, which began production during April 2018. The Virgo
A-10 ST well is in the JV Drilling Program. At June 30, 2018 there were three wells being
drilled including the A-5 ST at Mahogany, the A-12 well at Virgo
and the ST 320 A-2 well at our Ewing Bank 910 field. Each of
the wells in progress at the end of the quarter is part of the JV
Drilling Program. During the six months ended June 30, 2017, we completed three wells. We
did not have any dry holes in either period.
Mid-Year 2018 Proved Reserves: SEC proved reserves
as of June 30, 2018 totaled 78.0
million Boe, an increase of 5% from year-end 2017 proved reserves.
The mid-year 2018 reserves, which were 80% proved developed
and proved developed non-producing, were 58% liquids. The
present value of our SEC proved reserves, discounted at 10%
("PV-10"), was $1.3 billion, a 30%
increase from year-end 2017, primarily due to upward revisions of
previous estimates and higher average prices. The SEC PV-10 is
based on an average crude oil price of $57.67 per barrel and average natural gas price
of $2.92 per Mcf, both before
adjustment for quality, transportation fees, energy content, and
regional price differentials.
OPERATIONS UPDATE
We are currently operating or participating in three active
drilling programs in the Gulf of
Mexico, as described below.
Ship Shoal 349 "Mahogany" (operated, shelf, in the JV
Drilling Program): The SS349 A-5ST was completed in
July and began producing. The well targeted the 'Q' and 'P'
sands and is currently producing around 2,000 Boe per day
gross. This is the only well in the Mahogany field that is
part of the JV Drilling Program.
Ship Shoal 349 "Mahogany" (operated, shelf, 100% working
interest): Once the rig at Mahogany completed the A-5 ST
well the rig skid over to begin drilling the A-19 well. The
well is targeting a number of field pay sands in our Mahogany
field.
Viosca Knoll 823 "Virgo" (operated, shelf, in JV Drilling
Program): The A-10 ST well was completed and brought on
line in April 2018. The platform rig was skid and commenced
drilling the A-12 well (that is in block VK779). This well is
structurally higher and up dip to another well that has logged pay
in a principal target sand. Following the A-12 well, the rig
is expected to commence drilling the A-13 well.
Ewing Bank 910 Field Area (deepwater, in JV Drilling Program,
non-operated well): In mid-May, a rig spud and is
currently drilling the ST 320 A-2 well from the South Timbalier 311
Platform that is all part of the Ewing Bank 910 field.
Following the A-2 well operations, the rig is then expected
to drill the ST320 A-3 well. We believe both of these wells
are low-risk exploration opportunities with multiple stacked pay
sands. Assuming success, these wells are expected to be
brought on line quickly via existing infrastructure and
pipelines.
Well Recompletions and Workovers: During the second
quarter of 2018 we performed one recompletion that added
approximately 261 Boe per day of initial production and six
workovers that added approximately 2,743 Boe per day of initial
production.
Third Quarter and Full Year 2018 Production and Expense
Guidance
Our guidance for the third quarter and full year 2018 in the
table below 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".
|
Third
Quarter
|
Full
Year
|
Production
|
2018
|
2018
|
|
|
|
Oil and NGL's
(MMBbls)
|
1.9 - 2.1
|
7.8 - 8.6
|
|
|
|
Natural Gas
(Bcf)
|
7.2 - 8.0
|
32.2 -
35.6
|
|
|
|
Total
(Bcfe)
|
18.5 -
20.4
|
79.0 -
87.4
|
|
|
|
Total
(MMBoe)
|
3.1 - 3.4
|
13.2 -
14.6
|
|
|
|
Operating
Expenses
|
Third
Quarter
|
Full
Year
|
($ in
millions)
|
2018
|
2018
|
|
|
|
Lease operating
expenses
|
$43 - $47
|
$159 -
$176
|
|
|
|
Gathering,
transportation & production
taxes
|
$6 - $7
|
$23 - $26
|
|
|
|
General and
administrative
|
$14 - $16
|
$56 - $62
|
|
|
|
Income tax rate
benefit
|
|
0%
|
Conference Call Information: W&T will hold a
conference call to discuss our financial and operational results on
Thursday, August 2, 2018, 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. A replay of the
conference call will be available after the call until August 9, 2018, and may be accessed by calling
201-612-7415 and using the passcode 13681585#.
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 48 producing fields in federal
and state waters and has under lease approximately 650,000 gross
acres, including approximately 440,000 gross acres on the Gulf of
Mexico Shelf and approximately 210,000 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, 2017
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
|
|
Six Months
Ended
|
|
June
30,
|
|
June
30,
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
(In thousands,
except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
Oil
|
$
|
116,618
|
|
$
|
85,622
|
|
$
|
213,924
|
|
$
|
170,593
|
NGLs
|
|
8,734
|
|
|
7,054
|
|
|
18,394
|
|
|
15,796
|
Natural
gas
|
|
22,977
|
|
|
29,258
|
|
|
48,844
|
|
|
59,016
|
Other
|
|
1,283
|
|
|
1,389
|
|
|
2,663
|
|
|
2,311
|
Total
revenues
|
|
149,612
|
|
|
123,323
|
|
|
283,825
|
|
|
247,716
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating costs and
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
Lease operating
expenses
|
|
35,582
|
|
|
31,519
|
|
|
72,425
|
|
|
71,683
|
Gathering,
transportation costs and production taxes
|
|
5,367
|
|
|
5,767
|
|
|
10,879
|
|
|
12,491
|
Depreciation,
depletion, amortization and accretion
|
|
39,757
|
|
|
40,364
|
|
|
77,838
|
|
|
80,354
|
General and
administrative expenses
|
|
14,220
|
|
|
16,474
|
|
|
29,258
|
|
|
29,748
|
Derivative (gain)
loss
|
|
6,219
|
|
|
(3,689)
|
|
|
6,219
|
|
|
(7,644)
|
Total costs and
expenses
|
|
101,145
|
|
|
90,435
|
|
|
196,619
|
|
|
186,632
|
Operating
income
|
|
48,467
|
|
|
32,888
|
|
|
87,206
|
|
|
61,084
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
expense
|
|
12,147
|
|
|
11,436
|
|
|
23,470
|
|
|
22,730
|
Gain on exchange of
debt
|
|
-
|
|
|
8,056
|
|
|
-
|
|
|
7,811
|
Other (income)
expense, net
|
|
125
|
|
|
5,168
|
|
|
(208)
|
|
|
5,114
|
Income before income
tax expense (benefit)
|
|
36,195
|
|
|
24,340
|
|
|
63,944
|
|
|
41,051
|
Income tax expense
(benefit)
|
|
112
|
|
|
(8,975)
|
|
|
221
|
|
|
(16,563)
|
Net income
|
$
|
36,083
|
|
$
|
33,315
|
|
$
|
63,723
|
|
$
|
57,614
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted
earnings per common share
|
$
|
0.25
|
|
$
|
0.23
|
|
$
|
0.44
|
|
$
|
0.40
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
common shares outstanding
|
|
138,929
|
|
|
137,552
|
|
|
138,892
|
|
|
137,533
|
W&T OFFSHORE,
INC. AND SUBSIDIARIES
|
Condensed
Operating Data
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
|
|
|
June
30,
|
|
|
|
|
Variance
|
|
2018
|
|
2017
|
|
Variance
|
|
Percentage(2)
|
Net sales
volumes:
|
|
|
|
|
|
|
|
|
|
|
Oil
(MBbls)
|
|
1,738
|
|
|
1,923
|
|
|
(185)
|
|
-9.6%
|
NGL
(MBbls)
|
|
316
|
|
|
351
|
|
|
(35)
|
|
-10.0%
|
Oil and NGLs
(MBbls)
|
|
2,055
|
|
|
2,272
|
|
|
(217)
|
|
-9.6%
|
Natural gas
(MMcf)
|
|
8,186
|
|
|
9,890
|
|
|
(1,704)
|
|
-17.2%
|
Total oil and natural
gas (MBoe) (1)
|
|
3,419
|
|
|
3,921
|
|
|
(502)
|
|
-12.8%
|
Total oil and natural
gas (MMcfe) (1)
|
|
20,514
|
|
|
23,524
|
|
|
(3,010)
|
|
-12.8%
|
|
|
|
|
|
|
|
|
|
|
|
Average daily
equivalent sales (Boe/d)
|
|
37.6
|
|
|
43.1
|
|
|
(5.5)
|
|
-12.8%
|
Average daily
equivalent sales (MMcfe/d)
|
|
225.4
|
|
|
258.5
|
|
|
(33.1)
|
|
-12.8%
|
|
|
|
|
|
|
|
|
|
|
|
Average realized
sales prices:
|
|
|
|
|
|
|
|
|
|
|
Oil
($/Bbl)
|
$
|
67.09
|
|
$
|
44.54
|
|
$
|
22.55
|
|
50.6%
|
NGLs
($/Bbl)
|
|
27.61
|
|
|
20.15
|
|
|
7.46
|
|
37.0%
|
Oil and NGLs
($/Bbl)
|
|
61.01
|
|
|
40.78
|
|
|
20.23
|
|
49.6%
|
Natural gas
($/Mcf)
|
|
2.81
|
|
|
2.96
|
|
|
(0.15)
|
|
-5.1%
|
Barrel of oil
equivalent ($/Boe)
|
|
43.38
|
|
|
31.10
|
|
|
12.28
|
|
39.5%
|
Natural gas
equivalent ($/Mcfe)
|
|
7.23
|
|
|
5.18
|
|
|
2.05
|
|
39.6%
|
|
|
|
|
|
|
|
|
|
|
|
Average per Boe
($/Boe):
|
|
|
|
|
|
|
|
|
|
|
Lease operating
expenses
|
$
|
10.41
|
|
$
|
8.04
|
|
$
|
2.37
|
|
29.5%
|
Gathering and
transportation costs and production taxes
|
|
1.57
|
|
|
1.47
|
|
|
0.10
|
|
6.8%
|
Depreciation,
depletion, amortization and accretion
|
|
11.63
|
|
|
10.29
|
|
|
1.34
|
|
13.0%
|
General and
administrative expenses
|
|
4.16
|
|
|
4.20
|
|
|
(0.04)
|
|
-1.0%
|
|
|
|
|
|
|
|
|
|
|
|
Average per Mcfe
($/Mcfe):
|
|
|
|
|
|
|
|
|
|
|
Lease operating
expenses
|
$
|
1.73
|
|
$
|
1.34
|
|
$
|
0.39
|
|
29.1%
|
Gathering and
transportation costs and production taxes
|
|
0.26
|
|
|
0.25
|
|
|
0.01
|
|
4.0%
|
Depreciation,
depletion, amortization and accretion
|
|
1.94
|
|
|
1.72
|
|
|
0.22
|
|
12.8%
|
General and
administrative expenses
|
|
0.69
|
|
|
0.70
|
|
|
(0.01)
|
|
-1.4%
|
|
(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)
|
|
|
|
|
|
|
|
June
30,
|
|
December
31,
|
|
2018
|
|
2017
|
|
(In thousands,
except
|
|
share
data)
|
Assets
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
Cash and cash
equivalents
|
$
|
129,440
|
|
$
|
99,058
|
Receivables:
|
|
|
|
|
|
Oil and
natural gas sales
|
|
52,073
|
|
|
45,443
|
Joint
interest
|
|
19,366
|
|
|
19,754
|
Income
taxes
|
|
65,240
|
|
|
13,006
|
Total
receivables
|
|
136,679
|
|
|
78,203
|
Prepaid expenses and
other assets
|
|
20,470
|
|
|
13,419
|
Total current
assets
|
|
286,589
|
|
|
190,680
|
|
|
|
|
|
|
Property and
equipment
|
|
8,189,495
|
|
|
8,123,875
|
Less accumulated
depreciation, depletion and amortization
|
|
7,613,422
|
|
|
7,544,859
|
Net property and
equipment
|
|
576,073
|
|
|
579,016
|
Restricted deposits
for asset retirement obligations
|
|
26,072
|
|
|
25,394
|
Income tax
receivables
|
|
-
|
|
|
52,097
|
Other
assets
|
|
69,418
|
|
|
60,393
|
Total
assets
|
$
|
958,152
|
|
$
|
907,580
|
|
|
|
|
|
|
Liabilities and
Shareholders' Deficit
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
Accounts
payable
|
$
|
46,464
|
|
$
|
83,665
|
Undistributed oil and
natural gas proceeds
|
|
22,649
|
|
|
20,129
|
Asset retirement
obligations
|
|
27,923
|
|
|
23,613
|
Current maturities of
long-term debt:
|
|
|
|
|
|
Principal
|
|
189,829
|
|
|
-
|
Carrying
value adjustments
|
|
34,917
|
|
|
22,925
|
Total current maturities of long-term debt
|
|
224,746
|
|
|
22,925
|
Accrued
liabilities
|
|
20,505
|
|
|
17,930
|
Total current
liabilities
|
|
342,287
|
|
|
168,262
|
Long-term
debt:
|
|
|
|
|
|
Principal
|
|
713,365
|
|
|
889,790
|
Carrying value
adjustments
|
|
47,605
|
|
|
79,337
|
Long-term debt, less current portion - carrying value
|
|
760,970
|
|
|
969,127
|
|
|
|
|
|
|
Asset retirement
obligations, less current portion
|
|
289,297
|
|
|
276,833
|
Other
liabilities
|
|
73,007
|
|
|
66,866
|
Commitments and
contingencies
|
|
-
|
|
|
-
|
Shareholders'
deficit:
|
|
|
|
|
|
Common stock,
$0.00001 par value; 200,000,000 shares authorized;
142,022,971 issued and 139,153,798
outstanding at June 30, 2018; 141,960,462 issued and
139,091,289 outstanding at December 31,
2017
|
|
1
|
|
|
1
|
Additional paid-in
capital
|
|
548,196
|
|
|
545,820
|
Retained earnings
(deficit)
|
|
(1,031,439)
|
|
|
(1,095,162)
|
Treasury stock, at
cost
|
|
(24,167)
|
|
|
(24,167)
|
Total shareholders'
deficit
|
|
(507,409)
|
|
|
(573,508)
|
Total liabilities and
shareholders' deficit
|
$
|
958,152
|
|
$
|
907,580
|
W&T OFFSHORE,
INC. AND SUBSIDIARIES
|
Condensed
Consolidated Statements of Cash Flows
|
(Unaudited)
|
|
|
|
|
|
|
|
Six Months
Ended
|
|
June
30,
|
|
2018
|
|
2017
|
|
(In
thousands)
|
|
|
Operating
activities:
|
|
|
|
|
|
Net Income
|
$
|
63,723
|
|
$
|
57,614
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
|
|
Depreciation,
depletion, amortization and accretion
|
|
77,838
|
|
|
80,354
|
Gain on exchange of
debt
|
|
-
|
|
|
(7,811)
|
Amortization of debt
items and other items
|
|
1,126
|
|
|
836
|
Share-based
compensation
|
|
2,434
|
|
|
3,466
|
Derivative (gain)
loss
|
|
6,219
|
|
|
(7,644)
|
Cash receipts
(payments) on derivative settlements, net
|
|
(1,149)
|
|
|
2,208
|
Deferred income
taxes
|
|
221
|
|
|
212
|
Changes in operating
assets and liabilities:
|
|
|
|
|
|
Oil and
natural gas receivables
|
|
(6,630)
|
|
|
3,675
|
Joint
interest receivables
|
|
251
|
|
|
1,965
|
Insurance reimbursements
|
|
-
|
|
|
30,100
|
Income
taxes
|
|
(138)
|
|
|
(16,960)
|
Prepaid
expenses and other assets
|
|
(14,323)
|
|
|
(3,575)
|
Escrow
deposit - Apache lawsuit
|
|
-
|
|
|
(49,500)
|
Asset
retirement obligation settlements
|
|
(12,124)
|
|
|
(36,021)
|
Accounts
payable, accrued liabilities and other
|
|
(2,256)
|
|
|
6,666
|
Net cash provided by
operating activities
|
|
115,192
|
|
|
65,585
|
|
|
|
|
|
|
Investing
activities:
|
|
|
|
|
|
Investment in oil and
natural gas properties and equipment
|
|
(31,803)
|
|
|
(43,800)
|
Changes in operating
assets and liabilities associated with investing
activities
|
|
(29,330)
|
|
|
(827)
|
Acquisition of
property interest
|
|
(16,617)
|
|
|
-
|
Purchases of
furniture, fixtures and other
|
|
-
|
|
|
(853)
|
Net cash used in
investing activities
|
|
(77,750)
|
|
|
(45,480)
|
|
|
|
|
|
|
Financing
activities:
|
|
|
|
|
|
Payment of interest
on 1.5 Lien Term Loan
|
|
(4,114)
|
|
|
(4,113)
|
Payment of interest
on 2nd Lien PIK Toggle Notes
|
|
(2,920)
|
|
|
(7,335)
|
Payment of interest
on 3rd Lien PIK Toggle Notes
|
|
-
|
|
|
(6,201)
|
Other
|
|
(26)
|
|
|
(372)
|
Net cash used in
financing activities
|
|
(7,060)
|
|
|
(18,021)
|
Increase in cash and
cash equivalents
|
|
30,382
|
|
|
2,084
|
Cash and cash
equivalents, beginning of period
|
|
99,058
|
|
|
70,236
|
Cash and cash
equivalents, end of period
|
$
|
129,440
|
|
$
|
72,320
|
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 to Net Income
Excluding Special Items
"Net Income Excluding Special Items" does not include the
unrealized commodity derivative (gain) loss, default in payment by
joint interest partners, gain on exchange of debt, lawsuits and
settlements, and penalties, litigation and related interest and
associated income tax adjustments. Net Income 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
|
|
Six Months
Ended
|
|
June
30,
|
|
June
30,
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
(In thousands,
except per share amounts)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
$
|
36,083
|
|
$
|
33,315
|
|
$
|
63,723
|
|
$
|
57,614
|
Unrealized commodity
derivative (gain) loss
|
|
5,070
|
|
|
(2,194)
|
|
|
5,070
|
|
|
(5,436)
|
Default in payment by
joint interest partners
|
|
201
|
|
|
270
|
|
|
543
|
|
|
475
|
Gain on exchange of
debt
|
|
-
|
|
|
(8,056)
|
|
|
-
|
|
|
(7,811)
|
Apache
lawsuit
|
|
-
|
|
|
6,285
|
|
|
-
|
|
|
6,285
|
EC 321
settlement
|
|
-
|
|
|
(1,109)
|
|
|
-
|
|
|
(1,109)
|
Penalties, litigation
and related interest
|
|
579
|
|
|
1,289
|
|
|
579
|
|
|
1,820
|
Income tax adjustment
for the items above
|
|
(18)
|
|
|
1,297
|
|
|
(19)
|
|
|
2,328
|
Net income excluding
special items
|
$
|
41,915
|
|
$
|
31,097
|
|
$
|
69,896
|
|
$
|
54,166
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted
income per common share, excluding special items
|
$
|
0.29
|
|
$
|
0.22
|
|
$
|
0.48
|
|
$
|
0.38
|
W&T OFFSHORE, INC. AND
SUBSIDIARIES
Non-GAAP Information
Reconciliation of Net Income to Adjusted
EBITDA
We define EBITDA as net income plus income tax expense
(benefit), net interest expense, and depreciation, depletion,
amortization. Adjusted EBITDA excludes the unrealized
commodity derivative (gain) loss, default in payment by joint
interest partners, gain on exchange of debt, lawsuits and
settlements, and civil penalties and other litigation. 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, 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
to EBITDA and Adjusted EBITDA along with our Adjusted EBITDA
margin.
|
Three Months
Ended
|
|
Six Months
Ended
|
|
June
30,
|
|
June
30,
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
(In
thousands)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
$
|
36,083
|
|
$
|
33,315
|
|
$
|
63,723
|
|
$
|
57,614
|
Income tax expense
(benefit)
|
|
112
|
|
|
(8,975)
|
|
|
221
|
|
|
(16,563)
|
Net interest
expense
|
|
12,272
|
|
|
11,429
|
|
|
23,262
|
|
|
22,718
|
Depreciation,
depletion, amortization and accretion
|
|
39,757
|
|
|
40,364
|
|
|
77,838
|
|
|
80,354
|
EBITDA
|
|
88,224
|
|
|
76,133
|
|
|
165,044
|
|
|
144,123
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized commodity
derivative (gain) loss
|
|
5,070
|
|
|
(2,194)
|
|
|
5,070
|
|
|
(5,436)
|
Default in payment by
joint interest partners
|
|
201
|
|
|
270
|
|
|
543
|
|
|
475
|
Gain on exchange of
debt
|
|
-
|
|
|
(8,056)
|
|
|
-
|
|
|
(7,811)
|
Apache
lawsuit
|
|
-
|
|
|
6,285
|
|
|
-
|
|
|
6,285
|
EC 321
settlement
|
|
-
|
|
|
(1,109)
|
|
|
-
|
|
|
(1,109)
|
Civil penalties and
other litigation
|
|
(194)
|
|
|
1,289
|
|
|
(194)
|
|
|
1,820
|
Adjusted
EBITDA
|
$
|
93,301
|
|
$
|
72,618
|
|
$
|
170,463
|
|
$
|
138,347
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
Margin
|
|
62%
|
|
|
59%
|
|
|
60%
|
|
|
56%
|
CONTACT:
|
Lisa
Elliott
|
Danny
Gibbons
|
|
Dennard Lascar
Investor Relations
|
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-second-quarter-2018-operational-and-financial-results-and-third-quarter-2018-guidance-300690584.html
SOURCE W&T Offshore, Inc.