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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, publications, and personal analysis intended for educational and research purposes [1]. - It explicitly states that the information should not be interpreted as recommendations or advice for any financial actions [1]. - The content is not tailored to individual financial situations or needs, highlighting the necessity for users to apply their own discretion [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]. - Users are encouraged to perform their own research before making investment decisions, especially regarding instruments they do not fully understand [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, publications, and personal analysis 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 consider their financial situation and needs before making decisions based on the information provided [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 perform their own research and understand the risks involved before investing in any financial instruments [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, publications, and personal analysis 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].

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Financial Data and Key Metrics Changes - The company reported production of 30,500 barrels of oil equivalent per day, near the top end of guidance despite unplanned downtime due to freezing weather [7] - Adjusted EBITDA for the first quarter was $32,200,000, an increase of 2% compared to the fourth quarter of 2024 [8] - Free cash flow generated in the first quarter was $10,500,000 [8] - Total debt decreased from $393,000,000 at year-end 2024 to $350,000,000 by the end of the first quarter of 2025, while net debt reduced from $284,000,000 to $244,000,000 [11] Business Line Data and Key Metrics Changes - The company focused on low-risk acquisitions rather than drilling, emphasizing the importance of generating free cash flow and maintaining a solid base of proved reserves [12] - Production from newly acquired fields, West Delta 73 and Main Pass 108, is expected to ramp up significantly in the second quarter of 2025, contributing to overall production growth [12][13] Market Data and Key Metrics Changes - The company has locked in favorable price ranges for natural gas through costless collars for 50,000 MMBtus per day for March 2025 and 70,000 MMBtus per day from April to December 2025 [10] - The regulatory environment has improved under the new administration, which is expected to positively impact the offshore energy industry [15][16] Company Strategy and Development Direction - The company remains committed to profitability, operational execution, and returning value to stakeholders while ensuring employee safety [6] - The strategy includes focusing on accretive low-risk acquisitions of producing properties rather than higher-risk drilling in the current uncertain commodity price environment [11][12] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism regarding the regulatory changes that will reduce financial assurance costs and improve credit facilities [6][14] - The company anticipates a production increase in the second quarter of 2025, with a midpoint guidance of 34,500 barrels of oil equivalent per day, representing a 13% increase from the first quarter [13] Other Important Information - The company has paid six quarterly cash dividends since initiating its dividend policy in late 2023 and announced the second quarter 2025 payment [9] - A successful offering of $350,000,000 in new second lien notes was completed, which reduced interest rates and improved liquidity [9][10] Q&A Session Summary Question: Confirmation of focus on recompletions and workovers without plans for new drilling - Management confirmed the current strategy focuses on recompletions and workovers due to volatility in oil and gas prices [21] Question: Financial impact of the April 8 announcement from the Department of Interior - Management indicated a significant reduction in financial assurance costs, positively impacting the company and credit facilities [28] Question: Production cadence across quarters for 2025 - Management provided insights on production increases expected from West Delta 73 and Main Pass 108, with ongoing workovers planned for better weather [30][31] Question: Opportunities for further asset sales - Management acknowledged the potential for selling other royalty interests, although it is not a primary focus [32] Question: Performance tracking of newly acquired fields - Management confirmed that the new fields are performing as expected, with potential for increased production [38] Question: Liquidity impact from financial assurance changes - Management noted that reduced financial assurance costs would free up liquidity, making acquisitions more feasible compared to drilling [41]

W&T Offshore (WTI) Q1 2025 Earnings Call May 07, 2025 12:00 PM ET Speaker0 Ladies and gentlemen, thank you for standing by. Welcome to the W and T Offshore First Quarter twenty twenty five Conference Call. During today's call, all parties will be in listen only mode. Following the company's prepared comments, the call will be opened for question and answers. During the question and answer session, we ask that you limit your questions to one and a follow-up. This conference is being recorded and a replay wil ...

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Core Viewpoint - W&T Offshore Inc. reported a narrower loss in Q1 2025 compared to estimates, but the loss increased year-over-year, with total revenues beating estimates but declining from the previous year [1][2]. Financial Performance - The company reported a loss of 13 cents per share, better than the Zacks Consensus Estimate of a loss of 14 cents, but worse than the prior year's loss of 5 cents per share [1]. - Total quarterly revenues were $129.9 million, exceeding the Zacks Consensus Estimate of $125 million, but down from $141 million in the same quarter last year [1]. Production Statistics - Average production for the quarter was 30.5 thousand barrels of oil equivalent per day (MBoe/d), down from 35.1 MBoe/d in Q1 2024, affected by freezing conditions [3]. - Oil production totaled 1,230 thousand barrels (MBbls), a decrease from 1,400 MBbls year-over-year, missing the estimate of 1,236 MBbls [3]. - Natural gas liquids output was 200 MBbls, down from 343 MBbls in the prior year, missing the estimate of 224 MBbls [4]. - Natural gas production was 7,884 million cubic feet (MMcf), lower than 8,733 MMcf in the previous year but above the estimate of 7,734 MMcf [4]. Realized Commodity Prices - The average realized price for oil was $71.31 per barrel, down from $76.44 year-over-year, but above the estimate of $69.03 [5]. - The average realized price of natural gas increased to $4.45 per thousand cubic feet from $2.48 in the prior year, exceeding the estimate of $4.34 [6]. - The average realized price for oil-equivalent output rose to $46.50 per barrel from $42.55 a year ago, surpassing the estimate of $44.91 [6]. Operating Expenses - Lease operating expenses increased to $25.88 per Boe from $22.14 in the prior year, lower than the estimate of $26.40 per Boe [7]. - General and administrative expenses rose to $7.35 per Boe from $6.41 year-over-year, higher than the estimate of $7.22 per Boe [7]. Cash Flow - Net cash used in operations was $3.2 million, compared to $11.6 million net cash provided in the prior year [8]. - Free cash flow decreased to $10.5 million from $32.4 million in the same quarter last year [8]. Capital Spending & Balance Sheet - W&T Offshore spent $8.5 million on oil and gas resources and equipment [10]. - As of March 31, 2025, cash and cash equivalents totaled $105.9 million, with net long-term debt at $349.5 million [10]. Guidance - For Q2 2025, production is expected to be between 2,977-3,295 Mboe, with full-year production anticipated to remain in the range of 11,983-13,257 Mboe [11]. - Lease operating expenses for Q2 are projected to be between $71.3-$78.9 million, with full-year expenses expected in the range of $280-$310 million [11]. - Full-year capital expenditures are anticipated to be between $34-$42 million [11].

PART I – FINANCIAL INFORMATION [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) This section presents W&T Offshore, Inc.'s unaudited condensed consolidated financial statements for Q1 2025 and 2024, highlighting a net loss of **$30.6 million** in Q1 2025 driven by lower revenues and a debt extinguishment loss Condensed Consolidated Balance Sheet Highlights (In thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Total Assets** | **$1,024,946** | **$1,098,930** | | Cash and cash equivalents | $105,933 | $109,003 | | Total current assets | $221,930 | $218,458 | | Oil and natural gas properties, net | $691,788 | $777,741 | | **Total Liabilities and Shareholders' Deficit** | **$1,024,946** | **$1,098,930** | | Total current liabilities | $187,931 | $246,084 | | Long-term debt, net | $349,481 | $365,935 | | Asset retirement obligations | $532,753 | $502,506 | | Total shareholders' deficit | ($82,796) | ($52,577) | Condensed Consolidated Statements of Operations (In thousands) | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Total revenues | $129,867 | $140,787 | | Total operating expenses | $138,111 | $140,791 | | Operating loss | ($8,244) | ($4) | | Loss on extinguishment of debt | $15,015 | $— | | Net loss | ($30,577) | ($11,474) | | Net loss per common share (basic and diluted) | ($0.21) | ($0.08) | Condensed Consolidated Statements of Cash Flows (In thousands) | Cash Flow Activity | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Net cash (used in) provided by operating activities | ($3,196) | $11,642 | | Net cash provided by (used in) investing activities | $63,267 | ($87,619) | | Net cash used in financing activities | ($63,141) | ($2,539) | | Change in cash, cash equivalents and restricted cash | ($3,070) | ($78,516) | [Note 1 — Nature of Operations and Basis of Presentation](index=7&type=section&id=Note%201%20%E2%80%94%20NATURE%20OF%20OPERATIONS%20AND%20BASIS%20OF%20PRESENTATION) W&T Offshore, Inc. is an independent oil and natural gas producer primarily operating offshore in the Gulf of America, with financial statements prepared under GAAP and SEC regulations - The company is an independent oil and natural gas producer with operations primarily in the Gulf of America, focusing on exploration, development, and acquisition[19](index=19&type=chunk) [Note 2 — Financial Instruments](index=7&type=section&id=Note%202%20%E2%80%94%20FINANCIAL%20INSTRUMENTS) This note details the company's financial instruments, including derivative contracts for natural gas price hedging and fair value of debt estimated using Level 2 inputs Open Henry Hub (NYMEX) Derivative Contracts as of March 31, 2025 | Period | Instrument Type | Daily Volumes (Mmbtu) | Total Volumes (Mmbtu) | Weighted Floor Price ($/Mmbtu) | Weighted Ceiling Price ($/Mmbtu) | | :--- | :--- | :--- | :--- | :--- | :--- | | Apr 2025 - Dec 2025 | costless collar | 70,000 | 19,250,000 | $4.02 | $5.32 | | Apr 2025 - Dec 2025 | puts | 62,182 | 17,100,000 | $2.27 | N/A | | Jan 2026 - Dec 2026 | puts | 55,890 | 20,400,000 | $2.35 | N/A | | Jan 2027 - Dec 2027 | puts | 52,603 | 19,200,000 | $2.37 | N/A | | Jan 2028 - Apr 2028 | puts | 49,587 | 6,000,000 | $2.50 | N/A | - For Q1 2025, the company recorded a net derivative loss of **$2.76 million**, compared to a net gain of **$4.88 million** in Q1 2024[26](index=26&type=chunk) [Note 3 — Asset Retirement Obligations](index=10&type=section&id=Note%203%20%E2%80%94%20ASSET%20RETIREMENT%20OBLIGATIONS) Asset Retirement Obligations increased to **$561.9 million** in Q1 2025, primarily due to accretion expense and revisions of estimated liabilities Changes in Asset Retirement Obligations (In thousands) | Description | Three Months Ended March 31, 2025 | | :--- | :--- | | Beginning Balance | $548,832 | | Liabilities settled | ($3,771) | | Accretion expense | $8,392 | | Liabilities incurred | $1,029 | | Revisions of estimated liabilities | $7,369 | | **Ending Balance** | **$561,851** | [Note 4 — Debt](index=10&type=section&id=Note%204%20%E2%80%94%20DEBT) The company completed a **$350.0 million** debt refinancing in January 2025, resulting in a **$15.1 million** loss on extinguishment and establishing a new **$50.0 million** revolving credit facility - On January 28, 2025, the Company issued **$350.0 million** of 10.75% Senior Second Lien Notes due 2029[30](index=30&type=chunk) - Net proceeds were used to purchase tendered 11.75% Notes, repay the **$114.2 million** Term Loan, and fund the redemption of the remaining 11.75% Notes[35](index=35&type=chunk) - The refinancing transactions were accounted for as an extinguishment, resulting in a recognized loss of **$15.1 million** in Q1 2025[38](index=38&type=chunk) - The company entered into a new Credit Agreement for a **$50.0 million** revolving credit facility maturing in July 2028, with no borrowings outstanding as of March 31, 2025[39](index=39&type=chunk)[46](index=46&type=chunk) [Note 5 — Commitments and Contingencies](index=15&type=section&id=Note%205%20%E2%80%94%20COMMITMENTS%20AND%20CONTINGENCIES) The company faces significant legal and regulatory matters, including **$254.7 million** in demanded collateral from surety providers and **$21.4 million** in contingent decommissioning obligations - The company is in litigation with multiple surety providers who have demanded approximately **$183.7 million** in collateral, with an additional provider demanding **$71 million**, bringing the total Demanded Collateral to approximately **$254.7 million**[55](index=55&type=chunk) - The company is appealing a **$4.7 million** disallowance of royalty reductions by the ONRR and has accrued **$5.0 million** for this matter, including estimated penalties[47](index=47&type=chunk) - As of March 31, 2025, the company has an accrual of **$21.4 million** for contingent decommissioning obligations related to properties previously divested or held by bankrupt third parties[62](index=62&type=chunk)[63](index=63&type=chunk) [Note 6 — Stockholders' Equity](index=19&type=section&id=Note%206%20%E2%80%94%20STOCKHOLDERS%27%20EQUITY) The company declared and paid a **$0.01** per share quarterly dividend totaling **$1.5 million** for Q1 2025, with a similar dividend declared for Q2 2025 - A quarterly dividend of **$0.01** per share (**$1.5 million** total) was paid on March 24, 2025[66](index=66&type=chunk) - A subsequent quarterly dividend of **$0.01** per share was declared on May 6, 2025, to be paid on May 27, 2025[67](index=67&type=chunk) [Note 7 — Income Taxes](index=21&type=section&id=Note%207%20%E2%80%94%20INCOME%20TAXES) The effective tax rate was **13.1%** for Q1 2025, influenced by nondeductible compensation and a **$30.9 million** valuation allowance against deferred tax assets - The effective tax rate was **13.1%** for Q1 2025 and **(10.0%)** for Q1 2024, differing from the federal statutory rate mainly due to nondeductible compensation and valuation allowance adjustments[69](index=69&type=chunk) - As of March 31, 2025, the company maintained a valuation allowance of **$30.9 million** against its deferred tax assets[70](index=70&type=chunk) [Note 8 — Net Loss Per Common Share](index=21&type=section&id=Note%208%20%E2%80%94%20NET%20LOSS%20PER%20COMMON%20SHARE) The company reported a net loss per common share of **$0.21** for Q1 2025, based on a **$30.6 million** net loss and **147.6 million** weighted average shares outstanding Net Loss Per Common Share Calculation | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Net loss (in thousands) | $(30,577) | $(11,474) | | Weighted average common shares outstanding (in thousands) | 147,598 | 146,857 | | **Net loss per common share (basic and diluted)** | **$(0.21)** | **$(0.08)** | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=24&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Q1 2025 financial performance, noting decreased revenues to **$129.9 million** due to lower production and oil prices, a **$15.1 million** debt extinguishment loss, and sufficient liquidity of **$105.9 million** cash and a **$50.0 million** credit facility [Business Overview](index=26&type=section&id=BUSINESS%20OVERVIEW) W&T Offshore, an independent oil and gas producer, received **$11.9 million** from asset sales and **$58.5 million** from insurance, while completing a **$350.0 million** debt refinancing and securing a new **$50.0 million** credit facility - In January 2025, the company received **$11.9 million** for the sale of a non-core interest and **$58.5 million** from an insurance claim settlement[88](index=88&type=chunk) - The company executed a major debt refinancing in January 2025, issuing **$350.0 million** of 10.75% Notes due 2029 to redeem its 11.75% Notes and repay its Term Loan[90](index=90&type=chunk)[91](index=91&type=chunk) [Regulatory Update](index=28&type=section&id=Regulatory%20Update) The company views recent Trump administration executive orders and Department of Interior filings as positive for reducing regulatory burdens and financial assurance requirements in the Gulf of America - The Trump administration issued executive orders in early 2025 aimed at reducing the regulatory burden on domestic energy companies[96](index=96&type=chunk)[99](index=99&type=chunk) - The Department of Interior indicated it will not seek supplemental financial assurance in the Gulf of America except for sole liability properties and certain other specific cases, which is viewed as a positive development by the company[97](index=97&type=chunk) [Results of Operations](index=30&type=section&id=RESULTS%20OF%20OPERATIONS) Q1 2025 total revenues decreased to **$129.9 million** due to lower production and oil prices, resulting in an operating loss of **$8.2 million** and a net loss of **$30.6 million** including a debt extinguishment loss Revenues and Production Volumes Comparison | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Total Revenues (in thousands) | $129,867 | $140,787 | | Total Production (MBoe) | 2,744 | 3,199 | | Avg. Realized Oil Price ($/Bbl) | $71.31 | $76.44 | | Avg. Realized NGL Price ($/Bbl) | $23.86 | $21.78 | | Avg. Realized Nat Gas Price ($/Mcf) | $4.45 | $2.48 | - Production volumes decreased by **0.5 MMBoe (14%)** YoY, primarily due to deferred production at Mobile Bay properties and shut-ins at other fields[106](index=106&type=chunk) Operating Expenses Comparison (per Boe) | Expense Category ($/Boe) | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Lease operating expenses | $25.88 | $22.14 | | Gathering, transportation and production taxes | $2.06 | $2.36 | | Depreciation, depletion and amortization | $11.99 | $10.61 | | General and administrative expenses | $7.35 | $6.41 | | **Total operating expenses** | **$50.34** | **$44.01** | - A loss on debt extinguishment of **$15.1 million** was recorded in Q1 2025 related to the debt refinancing[117](index=117&type=chunk) [Liquidity and Capital Resources](index=36&type=section&id=Liquidity%20and%20Capital%20Resources) The company's liquidity includes **$105.9 million** cash and a **$50.0 million** credit facility, with Q1 2025 showing **$3.2 million** net cash used in operations and **$8.9 million** in capital expenditures - As of March 31, 2025, the company had **$105.9 million** of unrestricted cash and **$50.0 million** available under its credit facility[122](index=122&type=chunk) Cash Flow Summary (In thousands) | Activity | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Operating activities | ($3,196) | $11,642 | | Investing activities | $63,267 | ($87,619) | | Financing activities | ($63,141) | ($2,539) | Capital Expenditures (In thousands) | Category | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Exploration and development | $7,555 | $3,022 | | Acquisitions of interests | $400 | $80,515 | | Seismic and other | $917 | $134 | | **Total (accrual basis)** | **$8,872** | **$83,671** | [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=40&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's market risk primarily stems from commodity price fluctuations, with a hypothetical **10%** price decline impacting Q1 2025 revenue by **$12.8 million**, partially mitigated by natural gas derivatives - A hypothetical **10%** decline in average realized sales prices for oil, NGL, and natural gas in Q1 2025 would have reduced revenue by approximately **$12.8 million**[138](index=138&type=chunk) Impact of Derivatives on Realized Natural Gas Prices ($/Mcf) | Description | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Average realized sales price (pre-derivatives) | $4.45 | $2.48 | | Effects of realized commodity derivatives | ($0.46) | $0.43 | | **Average realized sales price (post-derivatives)** | **$3.99** | **$2.91** | [Item 4. Controls and Procedures](index=40&type=section&id=Item%204.%20Controls%20and%20Procedures) The CEO and CFO concluded that disclosure controls and procedures are effective as of March 31, 2025, with no material changes to internal control over financial reporting during the quarter - The CEO and CFO concluded that as of March 31, 2025, the company's disclosure controls and procedures are effective[142](index=142&type=chunk) - No material changes to internal control over financial reporting occurred during the quarter ended March 31, 2025[143](index=143&type=chunk) PART II – OTHER INFORMATION [Item 1. Legal Proceedings](index=42&type=section&id=Item%201.%20Legal%20Proceedings) This section refers to Note 5 of the financial statements for detailed information regarding the company's ongoing legal proceedings - Information on legal proceedings is detailed in Part I, Item 1, Note 5 – Commitments and Contingencies[145](index=145&type=chunk) [Item 1A. Risk Factors](index=42&type=section&id=Item%201A.%20Risk%20Factors) The company identifies changes in U.S. trade policy and potential **10%** tariffs as a risk factor that could decrease commodity demand, increase operating costs, and cause market volatility - A new risk factor is identified related to changes in U.S. trade policy and tariffs, which could adversely affect business operations and financial results[147](index=147&type=chunk) - Specifically, a **10%** tariff on product imports announced on April 2, 2025, could decrease demand for commodities, increase operating costs, and cause financial market volatility[147](index=147&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=42&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) There were no unregistered sales of equity securities or use of proceeds to report for the period - None[149](index=149&type=chunk) [Item 5. Other Information](index=42&type=section&id=Item%205.%20Other%20Information) No directors or officers adopted or terminated a Rule 10b5-1 trading arrangement during the first quarter of 2025 - No directors or officers adopted or terminated a Rule 10b5-1 trading arrangement during the quarter[152](index=152&type=chunk) [Item 6. Exhibits](index=44&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including corporate governance documents, debt indentures, credit agreements, and officer certifications