W&T Offshore has reported operational and financial results for the first quarter of 2023.

Key highlights for the first quarter of 2023 and through the date of this press release include:

• Reported first quarter 2023 production of 32.5 thousand barrels of oil equivalent per day (“MBoe/d”) (56% liquids), or 2.9 million barrels of oil equivalent (“MMBoe”);
  • Production during the quarter was impacted by several planned periodic facility and pipeline maintenance projects at the Mobile Bay field as well as unplanned downtime at several non-operated fields that temporarily reduced production volumes;
  • Shut-in production has mostly been restored and total Company production is currently averaging approximately 38.1 Mboe/d;
• Generated net income of $26.0 million or $0.17 per diluted share in the first quarter of 2023, which includes $39.2 million in net unrealized gain on outstanding derivative contracts;
  • Adjusted Net Loss totaled $2.4 million, or $0.02 per share in the first quarter of 2023, which excludes the net unrealized gain on outstanding derivative contracts;
• Reported Adjusted EBITDA of $43.1 million for the first quarter of 2023;
• Produced Free Cash Flow of $12.4 million for the first quarter of 2023, the 21st consecutive quarter of positive Free Cash Flow;
• Closed the previously-announced offering of $275 million in aggregate principal amount of 11.75% Senior Second Lien Notes due 2026 (the “2026 Senior Second Lien Notes”) on January 27, 2023;
  • The Company used the net proceeds of the offering, along with cash on hand, to fund the redemption of all of the Company’s outstanding 9.75% Senior Second Lien Notes due 2023 (the “2023 Senior Second Lien Notes”);
• Maintained strong cash and cash equivalents of $177.4 million at March 31, 2023;
• Decreased Net Debt to $225.9 million as of March 31, 2023, which is down substantially from Net Debt of $504.8 million a year ago;
• Continued to maintain a low leverage profile with Net Debt to trailing twelve months (“TTM”) Adjusted EBITDA of 0.4 times compared to over 2.0 times one year ago;
• Appointed a new independent director to the Board, Dr. Nancy Chang, who will serve as chair of the Environmental, Safety and Governance Committee and as a member of the Audit Committee and the Nominating and Corporate Governance Committee; and
• Named apparent high bidder in the most recent Gulf of Mexico (“GOM”) lease sale on two shallow water blocks, Eugene Island South Addition block 371 and Eugene Island South Addition block 387. These two blocks cover a total of approximately 10,000 gross acres.

Tracy W. Krohn, W&T’s Board Chair and Chief Executive Officer, stated,
“We had another good quarter of positive operational and financial results. While production volumes were temporarily reduced to conduct a planned maintenance turnaround at our onshore facility in the Mobile Bay field, pipeline maintenance projects and other temporary unplanned downtime at non-operated fields, we continued to generate meaningful Adjusted EBITDA and Free Cash Flow. We delivered Adjusted EBITDA of $43.1 million in the first quarter and generated positive Free Cash Flow for the 21st consecutive quarter, totaling $12.4 million. We strengthened our balance sheet by issuing $275 million in new 2026 Senior Second Lien Notes and used the proceeds along with our considerable cash position to repurchase all $552.5 million principal amount of the outstanding 2023 Senior Second Lien Notes. This significantly reduces our interest payments by approximately $22 million per year, preserves our financial flexibility and improves our balance sheet moving forward. We have significant cash and cash equivalents of $177.4 million and our Net Debt to Adjusted EBITDA ratio is down to 0.4 times. We are increasingly better positioned to take advantage of potential acquisitions regardless of what the economic situation may be this year and poised to continue delivering on our strategic vision. Our commitment to enhancing shareholder value through a proven strategy focused on free cash flow generation and operational excellence has positioned us well for the future.”

Production, Prices, and Revenue: Production for the first quarter of 2023 was 32.5 MBoe/d, which was within the Company’s guidance range provided for the quarter. This represented a decrease of 16% from 38.6 Mboe/d for the fourth quarter of 2022 and a decrease of 14% from 37.8 MBoe/d for the corresponding period in 2022. The decrease in production was primarily driven by temporary unplanned downtime at non-operated fields and extended planned downtime associated with a maintenance project at the Company’s Mobile Bay onshore treatment facility to properly maintain, inspect, and clean out process vessels in the plant as well as pipeline maintenance, which shut in production at the Mobile Bay field for 35 days compared to 25 estimated in the guidance range provided for the first quarter of 2023. Shut-in production has mostly been fully restored and total Company production is currently averaging approximately 38.1 Mboe/d. First quarter 2023 production was comprised of 15.0 MBbl/d of oil (46%), 3.3 MBbl/d of natural gas liquids (“NGLs”) (10%), and 85.3 million cubic feet per day (“MMcf/d”) of natural gas (44%).

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