W&T Offshore provides the following operational update.

Map source: W&T Offshore

Key highlights included:

• Produced 53,553 barrels of oil equivalent per day (“Boe/d”), or 4.9 million Boe (48% liquids), in the first quarter of 2020, near the high end of W&T’s guidance range, reflecting a 61% increase from the first quarter of 2019 and slightly higher than the fourth quarter of 2019;
• Responded to the current low oil price environment with definitive actions to maintain financial flexibility, protect cash flow and preserve future value:
  • Suspended all drilling activities and significantly reduced its estimate of 2020 capital expenditures to $15 million to $25 million;
  • Proactively curtailed production at selected oil-weighted fields operated by the Company and has received notice of potential shut-ins of non-operated production;
  • Implementing 15% to 25% reductions in lease operating expenses without compromising safety or operational capabilities and reviewing G&A costs for additional savings.

Tracy W. Krohn, W&T's Chairman and Chief Executive Officer, commented,
“This is an extraordinary time for energy companies with the drastic fluctuations in supply and demand which has been compounded by the global COVID-19 pandemic. With that said, as provided by the SEC, we are temporarily delaying the filing of our 10-Q due to matters related to the pandemic.” 

“This is one of the most volatile and challenging markets I have seen in the past 40 years, but our overall strategy remains unchanged with our focus steadfastly on preserving and generating cash flow. While we have significantly reduced our expected 2020 capital spend by suspending our drilling activity, we remain confident in the long-term viability of our substantial inventory of drilling opportunities. We have proactively curtailed production on selected oil-weighted fields operated by the Company in this weak price environment, but maintain production at our Mahogany field and our key natural gas fields at our Mobile Bay complex. We have also received notification of potential shut-in production at non-operated properties. We will continue to monitor the oil markets to see if additional shut-ins are appropriate. From an expense standpoint, we are well on our way to implementing meaningful costs savings. We have an exceptional operational team in place, a diverse asset base with good-quality natural gas and oil fields and a strong hedge book, all of which provide us with the ability to weather uncertain commodity price environments.” 

Operational Update
During the first quarter of 2020, W&T’s production averaged 53,553 barrels of oil equivalent per day (“Boe/d”), or 4.9 million Boe (48% liquids), near the high end of the Company’s first quarter guidance range, reflecting a 61% increase from the first quarter of 2019 and slightly higher than the fourth quarter of 2019. 

During the first quarter of 2020, the Company performed one recompletion and four workovers that in total added approximately 700 net Boe/d to production. W&T currently plans to continue to perform recompletions and workovers that meet economic thresholds. 

As of April 30, 2020, W&T has temporarily shut-in production of approximately 3,300 Boe/d in selected oil-weighted fields operated by the Company but maintains production at its Mahogany field and its key natural gas fields at our Mobile Bay complex. The Company continues to monitor the market for the sale of its production as well as commodity prices and may consider additional curtailments of its operated production in the future, if market conditions warrant. W&T also received notice of production at non-operated fields that may potentially be shut-in by its other working interest owners. Those third-party curtailments are currently estimated to total approximately 3,400 Boe/d net to W&T. W&T is implementing 15% to 25% reductions in lease operating expenses without compromising safety or operational capabilities and reviewing G&A costs for additional savings. As a result of the production curtailments, proactive efforts to continually reduce costs in the lower price environment and ongoing uncertainty in the commodity markets, the Company has decided to withdraw the annual guidance it provided earlier this year and will provide such guidance again in the future when there is more stability in oil and gas markets.  

Response to COVID-19 Pandemic
W&T is committed to the health and safety of all its employees and contractors and has taken proactive steps to ensure their continued safety in its response to the COVID-19 pandemic. At W&T’s corporate offices, the Company mandated a work-from-home policy as of March 23, 2020 and assured that all employees had the ability to continue performing their work duties remotely. W&T continues to monitor the situation and will follow the advice of government and health leaders regarding fully reopening its corporate offices. 

The Company instituted screening of all personnel prior to entry to heliports and shorebases as well as its two Alabama gas plants, which includes a questionnaire and temperature check. The Company conducts daily temperature screenings at all offshore facilities and implemented procedures for distancing and hygiene at its field locations. 

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