W&T Offshore has reported operational and financial results for the second quarter of 2024 and declared a third quarter 2024 dividend of $0.01 per share.

Key highlights for the second quarter of 2024 and through the date of this press release include:

• Produced 34.9 thousand barrels of oil equivalent per day (“MBoe/d”) (55% liquids) at the midpoint of the Company’s second quarter guidance;
• Incurred lease operating expenses (“LOE”) of $74.0 million, which was below the bottom end of the Company’s second quarter guidance range;
• Generated net cash from operating activities of $37.4 million and Free Cash Flow of $18.7 million in the second quarter of 2024, marking the 26th consecutive quarter of positive Free Cash Flow;
• Reported net loss of $15.4 million, or $(0.10) per diluted share;
  • Adjusted Net Loss totaled $8.0 million, or $(0.05) per share, which excludes non-recurring costs, the net unrealized loss on outstanding derivative contracts, non-ARO plugging and abandonment (“P&A”) costs and related tax effect;
• Posted Adjusted EBITDA of $45.9 million;
• Reported cash and cash equivalents of $123.4 million, an increase of 30%, and Net Debt of $268.5 million, a decrease of 9%, at June 30, 2024 compared to the first quarter of 2024;
• Continued to maintain a low leverage profile with Net Debt to trailing twelve months (“TTM”) Adjusted EBITDA of 1.4x;
• Paid third consecutive quarterly dividend of $0.01 per common share in May 2024;
  • Declared third quarter of 2024 dividend of $0.01 per share, which will be payable on August 27, 2024 to stockholders of record on August 20, 2024; and
• Reported mid-year SEC proved reserves of 141.9 million barrels of oil equivalent (“MMBoe”), using SEC prices and based on a reserve report prepared by Netherland, Sewell and Associates, Inc. (“NSAI”), and a present value of those SEC proved reserves discounted at 10% (“PV-10”) of $1.4 billion, an increase of 15% and 28%, respectively, compared to year-end 2023.

Tracy W. Krohn, W&T’s Board Chair and Chief Executive Officer, commented,
“We remain committed to executing our strategic vision focused on free cash flow generation, maintaining solid production and maximizing margins while increasing proved reserves and PV-10. This commitment enabled W&T to deliver another quarter of solid results where production was at the midpoint of our guidance range, LOE was below the bottom end of our guidance range and more importantly, we increased our cash on hand by 30% while decreasing net debt by 9% compared to March 31, 2024. We generated strong Adjusted EBITDA of $45.9 million during the second quarter and our focus on quality free cash flow generation resulted in W&T reporting $18.7 million in Free Cash Flow, the 26th consecutive quarter of positive Free Cash Flow. We continue to make progress integrating our 2024 acquired assets into W&T, and we now have four of the six fields online, but we still have more work to do that should help to increase production from the new fields.”

“Our 2024 mid-year reserve report generated by NSAI shows a meaningful increase in reserves and PV-10 value, which demonstrates the resiliency and strength of our asset base. Our improved balance sheet enables us to continue to grow both organically and through targeted, complementary acquisitions in the Gulf of Mexico that allow us to leverage our scale and expertise in the basin. We are well positioned to capture and enhance value, while returning capital to our shareholders through the quarterly dividend program. Our proven and successful strategy and operational excellence should help us to continue to produce strong results both operationally and financially for the remainder of 2024 and into 2025.”

W&T acreage in the Gulf of Mexico

Production, Prices and Revenue: Production for the second quarter of 2024 was 34.9 MBoe/d, at the midpoint of the Company’s second quarter guidance and virtually flat compared with 35.1 MBoe/d for the first quarter of 2024 and 37.0 MBoe/d for the corresponding period in 2023. Second quarter 2024 production was comprised of 15.2 thousand barrels per day (“MBbl/d”) of oil (44%), 3.7 MBbl/d of natural gas liquids (“NGLs”) (11%), and 96.4 million cubic feet per day (“MMcf/d”) of natural gas (45%). Production in the second quarter of 2024 was negatively impacted by the Company’s primary Mobile Bay processing plant getting shut-in by the third-party operator to perform a turnaround. This forced W&T to re-route Mobile Bay volumes to a separate third-party processing plant that did not have the same capacity, leading to curtailed production and sales. These decreases were partially offset by increased production from wells acquired in both January 2024 and September 2023. The primary processing plant was back online in June 2024 and is now processing the Company’s Mobile Bay volumes at its existing capacity. Regarding W&T’s acquisition of assets in January 2024:

• Successfully negotiated a new beneficial agreement with the MO916 gas processor and returned the field to production on May 27th at rates consistent with expectations;
• With the return of MO916 to production, four of the six fields acquired are now on production; and
• For the two remaining shut-in fields, engineering design studies are in progress as W&T continues to work parallel paths on each to expedite their return to production, either through existing third-party sales routes or alternative Company-owned sales routes.

W&T’s average realized price per Boe before realized derivative settlements was $44.40 per Boe in the second quarter of 2024, an increase of 4% from $42.55 per Boe in the first quarter of 2024 and an increase of 21% from $36.76 per Boe in the second quarter of 2023. Second quarter 2024 oil, NGL and natural gas prices before realized derivative settlements were $80.29 per barrel, $24.43 per barrel, and $2.50 per Mcf, respectively.

Revenues for the second quarter of 2024 were $142.8 million, which was approximately 1% higher than first quarter of 2024 revenue of $140.8 million due to modestly higher realized prices partially offset by lower production volumes. Second quarter 2024 revenue was approximately 13% higher than $126.2 million of revenue in the second quarter of 2023 due to higher average realized prices, partially offset by moderately lower natural gas and NGL production volumes.

Well Recompletions and Workovers

During the second quarter of 2024, the Company performed three workovers and two recompletions that positively impacted production for the quarter. W&T plans to continue performing these low cost, short payout operations that impact both production and revenue.

Mid-Year 2024 Proved Reserves

As calculated by NSAI, W&T’s independent reserve engineering consultants, proved reserves using SEC pricing methodology totaled 141.9 MMBoe at June 30, 2024, compared with 123.0 MMBoe at year-end 2023. The increase in proved reserves was primarily driven by acquisition additions of 21.8 MMBoe and positive revisions of 3.5 MMBoe, partially offset by 6.3 MMBoe of production in the first half of 2024. The mid-year proved reserves, which were 54% proved developed producing, 29% proved developed non-producing, and 17% proved undeveloped, were 47% liquids (38% oil and 9% NGLs) and 53% natural gas. W&T operates approximately 94% of its mid-year 2024 proved reserves.

KeyFacts Energy: W&T Offshore US Gulf of Mexico country profile