Workflow
W&T Offshore(WTI) - 2025 Q2 - Quarterly Report

PART I – FINANCIAL INFORMATION Financial Statements 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 debt283336 - 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 million545659 Management's Discussion and Analysis of Financial Condition and Results of Operations 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 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 lease95 - 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 conditions96 - A judge recommended denying preliminary injunctions from two other surety providers that would have required the company to post $105 million in collateral97 - 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 calculations99 Results of Operations 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 rate111123 - A loss on extinguishment of debt of $15.1 million was recorded in the first six months of 2025 related to the January debt refinancing128 Liquidity and Capital Resources 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 months133 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 properties140 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 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 $24.5 million149 Impact of Natural Gas Derivatives on Average Realized Price ($/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 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 effective153 - No material changes were made to the company's internal control over financial reporting during the quarter ended June 30, 2025154 PART II – OTHER INFORMATION Legal Proceedings 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 Contingencies157 Risk Factors 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 report159 Unregistered Sales of Equity Securities and Use of Proceeds The company did not engage in any unregistered sales of equity securities during the reporting period - None reported for the period160 Defaults Upon Senior Securities No defaults upon senior securities occurred during the reporting period - None reported for the period161 Mine Safety Disclosures This section is not applicable as the company does not conduct mining operations - None reported162 Other Information 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 arrangement163 Exhibits 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 Act164