W&T Offshore(WTI) - 2024 Q4 - Annual Report

Financial Position and Liquidity - The company anticipates future financial position and liquidity to be influenced by market risks and regulatory changes[5]. - Significant capital needs are required to conduct operations and replace production, with potential limitations on accessing capital markets[22]. - The company’s ability to generate sufficient cash flow from operations is critical for funding capital expenditures and meeting working capital requirements[12]. Market and Operational Risks - The company faces risks from fluctuating oil, NGL, and natural gas prices, which could materially affect estimated volumes and future value of proved reserves[18]. - The geographic concentration of operations in the Gulf of America increases the risk of revenue loss due to environmental factors like hurricanes[18]. - The company is exposed to risks associated with cybersecurity breaches that could affect business operations[18]. - New technologies could render current exploration and drilling methods obsolete, impacting operational efficiency[18]. Regulatory and Environmental Liabilities - The company is subject to numerous environmental, health, and safety regulations that may result in material liabilities and costs[22]. - Future acquisitions may expose the company to significant liabilities, including decommissioning costs[18]. Reserves and Valuation - Proved developed reserves are expected to be recovered through existing wells and equipment, with minor costs compared to new wells[50]. - Proved reserves include quantities of oil, NGLs, and natural gas that are economically producible under existing conditions[51]. - Proved undeveloped reserves (PUDs) are expected to be recovered from future wells on undrilled acreage or existing wells requiring major expenditures[52]. - PV-10 represents the present value of estimated future revenues from proved reserves, discounted at 10% annually[53]. - SEC pricing is based on the unweighted average first-day-of-the-month commodity price for crude oil and natural gas over the preceding twelve months[56]. Acquisition and Divestiture Risks - The company may not realize all anticipated benefits from future acquisitions and divestitures[18].