PART I – FINANCIAL INFORMATION [Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) The unaudited condensed consolidated financial statements detail the company's financial position, operations, and cash flows for the periods ended June 30, 2025, and 2024 Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Total current assets** | $237,944 | $218,458 | | **Total assets** | $1,023,826 | $1,098,930 | | **Total current liabilities** | $200,584 | $246,084 | | **Long-term debt, net** | $349,508 | $365,935 | | **Total liabilities** | $1,126,547 | $1,151,507 | | **Total shareholders' deficit** | $(102,721) | $(52,577) | Condensed Consolidated Statements of Operations Highlights (in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | **Total revenues** | $122,367 | $142,757 | $252,234 | $283,544 | | **Operating loss** | $(12,853) | $(6,236) | $(21,097) | $(6,240) | | **Net loss** | $(20,884) | $(15,388) | $(51,461) | $(26,862) | | **Net loss per share (basic and diluted)** | $(0.14) | $(0.10) | $(0.35) | $(0.18) | Condensed Consolidated Statements of Cash Flows Highlights (in thousands) | Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | **Net cash provided by operating activities** | $24,766 | $49,088 | | **Net cash provided by (used in) investing activities** | $52,504 | $(94,388) | | **Net cash used in financing activities** | $(65,550) | $(4,663) | | **Change in cash, cash equivalents and restricted cash** | $11,720 | $(49,963) | - In January 2025, the company undertook a significant debt refinancing, issuing **$350.0 million of 10.75% Senior Second Lien Notes due 2029**, with proceeds used to repurchase existing notes and repay a term loan, resulting in a **$15.1 million loss on extinguishment of debt**[28](index=28&type=chunk)[33](index=33&type=chunk)[36](index=36&type=chunk) - The company is in litigation with surety bond providers demanding approximately **$183.7 million in collateral**, though a judge recommended denying a preliminary injunction for **$105 million**[54](index=54&type=chunk)[56](index=56&type=chunk)[59](index=59&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=26&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Revenues declined in the second quarter and first half of 2025 due to lower production and oil prices, while liquidity remains sufficient with $120.7 million in cash [Business Overview and Recent Developments](index=28&type=section&id=Business%20Overview%20and%20Recent%20Developments) The company operates 50 offshore fields and recently advanced legal settlements, while anticipating favorable tax impacts from new legislation - The company holds working interests in **50 producing offshore fields** in the Gulf of America, with approximately **629,700 gross acres** under lease[95](index=95&type=chunk) - Settlement agreements were reached with surety providers USSIC and PIIC, dismissing claims and withdrawing all demands for collateral until after December 31, 2026, under certain conditions[96](index=96&type=chunk) - A judge recommended denying preliminary injunctions from two other surety providers that would have required the company to post **$105 million in collateral**[97](index=97&type=chunk) - The newly signed One Big Beautiful Bill Act (OBBBA) is expected to have a **favorable impact on the company's tax expense** and valuation allowance due to provisions for 100% bonus depreciation and modified interest deduction calculations[99](index=99&type=chunk) [Results of Operations](index=31&type=section&id=Results%20of%20Operations) Revenues and production declined in Q2 and H1 2025 compared to the prior year, leading to wider net losses exacerbated by a debt extinguishment charge Q2 2025 vs Q2 2024 Performance Summary | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | **Total Revenues** | $122.4M | $142.8M | | **Total Production (MBoe)** | 3,052 | 3,177 | | **Avg. Realized Oil Price ($/Bbl)** | $63.55 | $80.29 | | **Avg. Realized Gas Price ($/Mcf)** | $3.75 | $2.50 | | **Total Operating Expenses** | $135.2M | $149.0M | | **Net Loss** | $(20.9M) | $(15.4M) | H1 2025 vs H1 2024 Performance Summary | Metric | H1 2025 | H1 2024 | | :--- | :--- | :--- | | **Total Revenues** | $252.2M | $283.5M | | **Total Production (MBoe)** | 5,796 | 6,376 | | **Avg. Realized Oil Price ($/Bbl)** | $67.39 | $78.35 | | **Avg. Realized Gas Price ($/Mcf)** | $4.07 | $2.49 | | **Total Operating Expenses** | $273.3M | $289.8M | | **Net Loss** | $(51.5M) | $(26.9M) | - Depreciation, depletion, and amortization (DD&A) expense **decreased by $10.2 million in Q2 2025** and **$11.3 million in H1 2025** compared to the prior year periods, primarily due to a lower depletion rate[111](index=111&type=chunk)[123](index=123&type=chunk) - A loss on extinguishment of debt of **$15.1 million** was recorded in the first six months of 2025 related to the January debt refinancing[128](index=128&type=chunk) [Liquidity and Capital Resources](index=40&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains adequate liquidity with $120.7 million in cash, despite a decrease in operating cash flow, offset by proceeds from insurance and asset sales - The company believes its cash on hand of **$120.7 million**, cash flows from operations, and **$50.0 million available** under its credit facility will be sufficient to meet cash requirements for at least the next 12 months[133](index=133&type=chunk) Cash Flow Summary (in thousands) | Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | **Operating activities** | $24,766 | $49,088 | | **Investing activities** | $52,504 | $(94,388) | | **Financing activities** | $(65,550) | $(4,663) | - Investing activities in H1 2025 were positively impacted by **$58.5 million in insurance proceeds** and **$11.9 million from the sale of oil and natural gas properties**[140](index=140&type=chunk) Capital Expenditures (in thousands) | Category | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | **Exploration and development** | $16,968 | $11,662 | | **Acquisitions of interests** | $711 | $80,635 | | **Total (accrual basis)** | $19,628 | $92,572 | [Quantitative and Qualitative Disclosures About Market Risk](index=43&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risk stems from commodity price volatility, which it partially mitigates through natural gas derivative contracts - A hypothetical **10% decline** in average realized sales prices for the six months ended June 30, 2025, would have decreased revenue by approximately **$24.5 million**[149](index=149&type=chunk) Impact of Natural Gas Derivatives on Average Realized Price ($/Mcf) | Period | Price Before Derivatives | Effect of Derivatives | Price Including Derivatives | | :--- | :--- | :--- | :--- | | **Q2 2025** | $3.75 | $1.02 | $4.77 | | **H1 2025** | $4.07 | $0.34 | $4.41 | [Controls and Procedures](index=44&type=section&id=Item%204.%20Controls%20and%20Procedures) The company's disclosure controls and procedures were deemed effective as of June 30, 2025, with no material changes during the quarter - The CEO and CFO concluded that as of June 30, 2025, the company's **disclosure controls and procedures are effective**[153](index=153&type=chunk) - **No material changes** were made to the company's internal control over financial reporting during the quarter ended June 30, 2025[154](index=154&type=chunk) PART II – OTHER INFORMATION [Legal Proceedings](index=45&type=section&id=Item%201.%20Legal%20Proceedings) Detailed information regarding the company's legal proceedings is available in Note 5 of the financial statements - Information on legal proceedings is provided in Part I, Item 1, Note 5 – Commitments and Contingencies[157](index=157&type=chunk) [Risk Factors](index=45&type=section&id=Item%201A.Risk%20Factors) No material changes to the company's risk factors were reported since its 2024 Annual Report - There have been **no material changes** in the company's risk factors from those previously disclosed in the 2024 Annual Report and the Q1 2025 report[159](index=159&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=45&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company did not engage in any unregistered sales of equity securities during the reporting period - None reported for the period[160](index=160&type=chunk) [Defaults Upon Senior Securities](index=45&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) No defaults upon senior securities occurred during the reporting period - None reported for the period[161](index=161&type=chunk) [Mine Safety Disclosures](index=45&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This section is not applicable as the company does not conduct mining operations - None reported[162](index=162&type=chunk) [Other Information](index=45&type=section&id=Item%205.%20Other%20Information) No directors or officers adopted or terminated a Rule 10b5-1 trading arrangement during the quarter - During Q2 2025, **no directors or officers adopted or terminated** a Rule 10b5-1 trading agreement or non-Rule 10b5-1 trading arrangement[163](index=163&type=chunk) [Exhibits](index=45&type=section&id=Item%206.%20Exhibits) The filing includes required exhibits such as CEO/CFO certifications and interactive data files - The report includes certifications from the CEO and CFO as required by **Sections 302 and 906 of the Sarbanes-Oxley Act**[164](index=164&type=chunk)

Core Viewpoint - W&T Offshore reported a non-GAAP loss per share of $(0.08) for Q2 2025, outperforming analyst expectations, but GAAP revenue of $122.4 million fell short of estimates, reflecting a 14% year-over-year decline due to lower commodity prices and cost inflation [1][6][15] Financial Performance - Non-GAAP EPS was $(0.08), better than the $(0.17) consensus, but a 60% decline from $(0.05) in Q2 2024 [2] - GAAP revenue was $122.4 million, down 14.3% from $142.8 million in Q2 2024 [2] - Adjusted EBITDA decreased by 23.3% to $35.2 million compared to Q2 2024 [2] - Free cash flow (non-GAAP) dropped to $3.6 million, an 80.7% decline from $18.7 million in Q2 2024 [2] - Lease operating expenses rose 3.9% to $76.9 million, with a per-barrel cost of $25.20 [2][7] Production and Operations - Production increased to 33.5 thousand barrels of oil equivalent per day, a 10% rise from Q1 2025, but a 4% decline from Q2 2024 [5] - Realized oil prices averaged $63.55 per barrel, down from $80.29 in Q2 2024, while natural gas prices averaged $3.75 per thousand cubic feet, up from $2.50 in Q2 2024 [6] - The company executed nine workover projects to sustain production without new drilling, particularly in Mobile Bay [7][10] Business Strategy - W&T Offshore focuses on acquiring and optimizing producing assets rather than high-risk drilling projects [3] - The company aims to build scale through operational excellence, disciplined capital spending, and strategic acquisitions [4] - Recent acquisitions, particularly the Cox assets, have been integrated to support production ramp-up [12] Reserves and Financial Health - As of June 30, 2025, the company reported 123.0 million barrels in proved reserves, stable compared to 127.0 million barrels at year-end 2024 [11] - The present value of reserves remained at $1.2 billion [11] - The company ended Q2 2025 with $120.7 million in cash and $229.4 million in net debt, reflecting a $14.7 million reduction [9] Future Outlook - For Q3 2025, production is projected between 33.1 to 36.6 thousand barrels of oil equivalent per day, with full-year guidance at 32.8 to 36.3 thousand barrels [14] - Lease operating expenses for Q3 2025 are expected to range from $71.5 million to $79.3 million [14] - The company remains committed to acquisitions, cash discipline, and operational improvements, maintaining a $0.01 per share quarterly dividend [15]

Core Insights - W&T Offshore reported a revenue of $122.37 million for the quarter ended June 2025, marking a year-over-year decline of 14.3% and an EPS of -$0.08 compared to -$0.05 a year ago, which indicates a negative trend in financial performance [1] - The reported revenue fell short of the Zacks Consensus Estimate of $136.9 million, resulting in a surprise of -10.62%, while the EPS exceeded expectations with a surprise of +42.86% against a consensus estimate of -$0.14 [1] Financial Performance Metrics - Average daily equivalent sales were 33,500 Boe/d, slightly below the three-analyst average estimate of 34,387.02 Boe/d [4] - Net sales volumes for natural gas were 9,285 MMcf, exceeding the average estimate of 9,081.27 MMcf, while NGLs were reported at 245 MBBL, slightly above the estimate of 243.25 MBBL [4] - Total oil and natural gas net sales volumes were 3,052 MBoe, below the average estimate of 3,141.14 MBoe, and oil sales volumes were 1,259 MBBL, also below the estimate of 1,384.28 MBBL [4] Revenue Breakdown - Revenue from oil was reported at $80.01 million, significantly lower than the average estimate of $87.84 million, reflecting a year-over-year decline of 27.9% [4] - NGL revenue was $4.72 million, below the estimate of $4.91 million, showing a year-over-year decline of 42.2% [4] - Natural gas revenue was $34.8 million, slightly below the estimate of $36.46 million, but represented a substantial year-over-year increase of 58.8% [4] - Other revenues reached $2.84 million, exceeding the average estimate of $2.14 million, with a year-over-year increase of 64.7% [4] Stock Performance - W&T shares have returned -4% over the past month, contrasting with the Zacks S&P 500 composite's increase of +0.6%, indicating underperformance in the market [3] - The stock currently holds a Zacks Rank 4 (Sell), suggesting potential underperformance relative to the broader market in the near term [3]

Production and Operations - Production increased by 10% quarter-over-quarter to 33.5 MBoe/d, with 49% being liquids[2] - In Q2 2025, W&T performed nine low-cost workovers, positively impacting production and revenue, particularly in Mobile Bay, the largest natural gas field[22] - Average daily equivalent sales increased to 33.5 MBoe/d in Q2 2025, compared to 30.5 MBoe/d in Q1 2025, but decreased from 34.9 MBoe/d in Q2 2024[41] - W&T operates approximately 94% of its mid-year 2025 proved reserves, with a composition of 44% liquids and 56% natural gas[23] - The company plans to continue low-cost operations that enhance production and revenue, focusing on short payout strategies[22] Financial Performance - Revenues for Q2 2025 were $122.4 million, a 6% decrease from Q1 2025 due to lower realized prices, partially offset by higher production volumes[5] - Adjusted EBITDA grew by 9% to $35.2 million compared to Q1 2025[2] - Operating loss for Q2 2025 was $12.853 million, compared to a loss of $6.236 million in Q2 2024[39] - The company reported a net loss of $20.884 million for Q2 2025, an improvement from a net loss of $30.577 million in Q1 2025 and a net loss of $15.388 million in Q2 2024[45] - The company reported a net cash provided by operating activities of $27.962 million in Q2 2025, compared to a net cash used in operating activities of $3.196 million in Q1 2025[45] Costs and Expenses - Lease operating expenses were $76.9 million, approximately 8% higher than Q1 2025, driven by increased base operating expenses and workover costs[7] - Average realized price per Boe decreased by 16% to $39.16 from Q1 2025[4] - The company’s average operating expenses per Boe were $39.16 in Q2 2025, a decrease from $46.50 in Q1 2025 and $44.40 in Q2 2024[41] - The company incurred capital expenditures of $10,445,000 for the three months ended June 30, 2025, compared to $8,472,000 in the previous quarter[56] Reserves and Valuation - The mid-year reserve report showed net positive revisions of 1.8 MMBoe, indicating the strength of the asset base[3] - As of June 30, 2025, proved reserves totaled 123.0 MMBoe, a decrease from 127.0 MMBoe at year-end 2024, primarily due to 5.8 MMBoe of production[23] - The pre-tax PV-10 of the mid-year 2025 proved reserves was $1.2 billion, unchanged from year-end 2024, indicating preserved reserve value despite production[24] - Average 12-month oil and natural gas prices used for mid-year 2025 proved reserves were $71.20 per barrel and $2.86 per MMBtu, respectively[25] Debt and Equity - Net debt decreased by $14.7 million to $229.4 million, with a Net Debt to trailing twelve months Adjusted EBITDA ratio of 1.8x[17] - The company declared a third quarter 2025 dividend of $0.01 per share, payable on August 25, 2025[19] - The weighted average shares outstanding for the three months ended June 30, 2025, was 147,847,000, slightly up from 147,598,000 in the previous quarter[51] - The adjusted net loss per common share for the three months ended June 30, 2025, was $(0.08), compared to $(0.13) in the previous quarter[51] Cash Flow - Free Cash Flow for the three months ended June 30, 2025, was $3,583,000, down from $10,483,000 in the previous quarter[56] - Cash and cash equivalents rose to $120.723 million as of June 30, 2025, up from $109.003 million at the end of 2024[43] - Total current assets increased to $237.944 million as of June 30, 2025, compared to $218.458 million at the end of 2024[43] - Total liabilities decreased to $1,126.547 million as of June 30, 2025, down from $1,165.421 million at the end of 2024[43]

Core Viewpoint - W&T Offshore, Inc. reported operational and financial results for Q2 2025, highlighting a 10% increase in production and a 9% growth in Adjusted EBITDA, while also declaring a dividend of $0.01 per share for Q3 2025 [1][2][3]. Production and Revenue - Production increased to 33.5 MBoe/d in Q2 2025, a 10% rise from Q1 2025, but a decrease from 34.9 MBoe/d in Q2 2024 [3][20]. - Revenues for Q2 2025 were $122.4 million, down 6% from Q1 2025 and 14% from Q2 2024, primarily due to lower realized prices despite higher production volumes [5][4]. Financial Performance - The company reported a net loss of $20.9 million, improving from a net loss of $30.6 million in Q1 2025 [2][34]. - Adjusted Net Loss was $11.8 million, compared to $19.1 million in Q1 2025 [2]. - Adjusted EBITDA grew to $35.2 million, a 9% increase from Q1 2025 [2]. Costs and Expenses - Lease Operating Expenses (LOE) were $76.9 million, within guidance, and approximately 8% higher than Q1 2025 [6]. - General & Administrative (G&A) expenses decreased to $17.7 million from $20.2 million in Q1 2025 [10]. - Depreciation, Depletion, and Amortization (DD&A) was $8.67 per Boe, down from $11.99 per Boe in Q1 2025 [8]. Balance Sheet and Liquidity - As of June 30, 2025, the company had unrestricted cash and cash equivalents of $120.7 million and total debt of $350.1 million, with Net Debt reduced to $229.4 million [15][40]. - The company had available liquidity of $170.7 million, including $50 million from a new revolving credit facility [15]. Reserves and Acquisitions - Mid-year proved reserves were reported at 123.0 MMBoe, with a PV-10 value of $1.2 billion [21][22]. - The company performed nine low-cost workovers that positively impacted production and revenue, particularly in Mobile Bay [20]. Surety Update - A settlement agreement with two major surety providers was reached, dismissing claims against the company and locking in premium rates through December 31, 2026 [18][19].

Core Viewpoint - The content emphasizes the importance of conducting personal due diligence and consulting competent advisors before making any financial decisions, particularly in the context of investments and trading [1]. Group 1 - The website provides general news, personal analysis, and third-party content intended for educational and research purposes [1]. - It explicitly states that the information does not constitute any recommendation or advice for investment actions [1]. - Users are advised to perform their own research and consider their financial situation before making decisions [1]. Group 2 - The website includes information about complex financial instruments such as cryptocurrencies and contracts for difference (CFDs), which carry a high risk of losing money [1]. - It encourages users to understand how these instruments work and the associated risks before investing [1].

Core Viewpoint - The content emphasizes the importance of conducting personal due diligence and consulting competent advisors before making any financial decisions, particularly in the context of investments and trading [1]. Group 1 - The website provides general news, personal analysis, and third-party content intended for educational and research purposes [1]. - It explicitly states that the information does not constitute any recommendation or advice for investment actions [1]. - Users are advised to perform their own research and consider their financial situation before making decisions [1]. Group 2 - The website includes information about complex financial instruments such as cryptocurrencies and contracts for difference (CFDs), which carry a high risk of losing money [1]. - It encourages users to understand how these instruments work and the associated risks before investing [1].

Core Viewpoint - The content emphasizes the importance of conducting personal due diligence and consulting competent advisors before making any financial decisions, particularly in the context of investments and trading activities [1]. Group 1 - The website provides general news, personal analysis, and third-party content intended for educational and research purposes [1]. - It explicitly states that the information does not constitute any recommendation or advice for investment actions [1]. - Users are advised to perform their own research and consider their financial situation before making decisions [1]. Group 2 - The website includes information about complex financial instruments such as cryptocurrencies and contracts for difference (CFDs), which carry a high risk of losing money [1]. - It encourages users to understand how these instruments work and the associated risks before investing [1].

Core Viewpoint - The content emphasizes the importance of conducting personal due diligence and consulting competent advisors before making any financial decisions, particularly in the context of investments and trading activities [1]. Group 1 - The website provides general news, personal analysis, and third-party content intended for educational and research purposes [1]. - It explicitly states that the information does not constitute any recommendation or advice for investment actions [1]. - Users are advised to perform their own research and consider their financial situation before making decisions [1]. Group 2 - The website includes information about complex financial instruments such as cryptocurrencies and contracts for difference (CFDs), which carry a high risk of losing money [1]. - It encourages users to understand how these instruments work and the associated risks before investing [1].

Core Points - W&T Offshore, Inc. will celebrate its 20th anniversary as a publicly traded company by ringing the closing bell at the NYSE on August 4, 2025 [1] - Tracy Krohn, the Founder, Chairman, CEO, and President of W&T, expressed gratitude to the Board of Directors, management team, and employees for their contributions to the company's success over the past 42 years [2] - The company has a strong commitment to responsible energy production and advocates for the offshore Gulf of America sector [2] Company Overview - W&T Offshore, Inc. is an independent oil and natural gas producer with operations in the Gulf of America, having grown through acquisitions, exploration, and development [3] - As of March 31, 2025, the company holds working interests in 52 fields, including 45 in federal waters and 7 in state waters, with approximately 634,700 gross acres under lease [3] - The company's production primarily comes from wells it operates, with significant acreage in both conventional and deepwater areas [3]