Document And Entity Information
Document And Entity Information - shares | 9 Months Ended | |
Sep. 30, 2023 | Oct. 31, 2023 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2023 | |
Document Transition Report | false | |
Entity File Number | 1-32414 | |
Entity Registrant Name | W&T OFFSHORE, INC. | |
Entity Incorporation, State or Country Code | TX | |
Entity Tax Identification Number | 72-1121985 | |
Entity Address, Address Line One | 5718 Westheimer Road, Suite 700 | |
Entity Address, City or Town | Houston | |
Entity Address, State or Province | TX | |
Entity Address, Postal Zip Code | 77057-5745 | |
City Area Code | 713 | |
Local Phone Number | 626-8525 | |
Title of 12(b) Security | Common Stock, par value $0.00001 | |
Trading Symbol | WTI | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 146,574,193 | |
Entity Central Index Key | 0001288403 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2023 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 148,993 | $ 461,357 |
Restricted cash | 4,417 | 4,417 |
Accounts receivable: | ||
Oil and natural gas sales | 48,522 | 66,146 |
Joint interest, net | 16,049 | 14,000 |
Income taxes | 275 | |
Total receivables | 64,846 | 80,146 |
Prepaid expenses and other current assets (Note 1) | 30,476 | 24,343 |
Total current assets | 248,732 | 570,263 |
Oil and natural gas properties and other, net (Note 1) | 771,454 | 735,215 |
Restricted deposits for asset retirement obligations | 22,168 | 21,483 |
Deferred income taxes | 42,633 | 57,280 |
Other assets (Note 1) | 40,386 | 47,549 |
Total assets | 1,125,373 | 1,431,790 |
Current liabilities: | ||
Accounts payable | 80,412 | 65,158 |
Undistributed oil and natural gas proceeds | 34,649 | 41,934 |
Advances from joint interest partners | 3,106 | 3,181 |
Current portion of asset retirement obligation (Note 8) | 33,169 | 25,359 |
Accrued liabilities (Note 1) | 34,264 | 74,041 |
Current portion of long-term debt, net (Note 2) | 30,015 | 582,249 |
Income taxes | 53 | 412 |
Total current liabilities | 215,668 | 792,334 |
Long-term debt, net (Note 2) | 367,144 | 111,188 |
Asset retirement obligations (Note 8) | 465,245 | 441,071 |
Other liabilities (Note 1) | 29,448 | 59,134 |
Deferred income taxes | 72 | 72 |
Commitments and contingencies (Note 12) | 17,809 | 20,357 |
Shareholders' equity: | ||
Preferred stock, $0.00001 par value; 20,000 shares authorized; none issued at September 30, 2023 and December 31, 2022 | ||
Common stock, $0.00001 par value; 200,000 shares authorized; 149,443 issued and 146,574 outstanding at September 30, 2023; 149,002 issued and 146,133 outstanding at December 31, 2022 | 1 | 1 |
Additional paid-in capital | 582,900 | 576,588 |
Retained deficit | (528,747) | (544,788) |
Treasury stock, at cost; 2,869 shares at September 30, 2023 and December 31, 2022 | (24,167) | (24,167) |
Total shareholders' equity | 29,987 | 7,634 |
Total liabilities and shareholders' equity | $ 1,125,373 | $ 1,431,790 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parentheticals) - $ / shares shares in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in dollars per share) | $ 0.00001 | $ 0.00001 |
Preferred stock, shares authorized (in shares) | 20,000 | 20,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.00001 | $ 0.00001 |
Common stock, shares authorized (in shares) | 200,000 | 200,000 |
Common stock, shares issued (in shares) | 149,443 | 149,002 |
Common stock, shares outstanding (in shares) | 146,574 | 146,133 |
Treasury stock, shares (in shares) | 2,869 | 2,869 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Revenues: | ||||
Total revenues | $ 142,411 | $ 266,485 | $ 400,316 | $ 731,297 |
Operating expenses: | ||||
Lease operating expenses | 61,826 | 59,010 | 193,033 | 155,397 |
Gathering, transportation and production taxes | 6,692 | 12,199 | 19,630 | 26,647 |
Depreciation, depletion, and amortization | 30,218 | 27,493 | 81,019 | 79,848 |
Asset retirement obligations accretion | 6,414 | 6,620 | 21,641 | 19,536 |
General and administrative expenses | 19,978 | 23,047 | 57,290 | 51,790 |
Total operating expenses | 125,128 | 128,369 | 372,613 | 333,218 |
Operating income | 17,283 | 138,116 | 27,703 | 398,079 |
Interest expense, net | 9,925 | 16,849 | 34,960 | 54,915 |
Derivative (gain) loss, net | (1,491) | 38,749 | (41,560) | 109,892 |
Other expense (income), net | 1,927 | (600) | 1,849 | (1,229) |
Income before income taxes | 6,922 | 83,118 | 32,454 | 234,501 |
Income tax expense | 4,777 | 16,397 | 16,413 | 46,801 |
Net income | $ 2,145 | $ 66,721 | $ 16,041 | $ 187,700 |
Net income per common share: | ||||
Basic | $ 0.01 | $ 0.46 | $ 0.11 | $ 1.30 |
Diluted | $ 0.01 | $ 0.46 | $ 0.11 | $ 1.30 |
Weighted average common shares outstanding: | ||||
Basic | 146,483 | 143,116 | 146,451 | 143,026 |
Diluted | 151,459 | 145,882 | 149,856 | 144,696 |
Oil and Condensate [Member] | ||||
Revenues: | ||||
Total revenues | $ 100,331 | $ 130,560 | $ 287,313 | $ 412,526 |
Natural Gas Liquids [Member] | ||||
Revenues: | ||||
Total revenues | 7,415 | 16,875 | 25,595 | 47,430 |
Natural Gas, Production [Member] | ||||
Revenues: | ||||
Total revenues | 32,515 | 113,673 | 80,757 | 257,452 |
Product and Service, Other [Member] | ||||
Revenues: | ||||
Total revenues | $ 2,150 | $ 5,377 | $ 6,651 | $ 13,889 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (DEFICIT) - USD ($) shares in Thousands, $ in Thousands | Common Stock Outstanding [Member] | Additional Paid-in Capital [Member] | Retained Deficit [Member] | Treasury Stock [Member] | Total |
Balances beginning (in shares) at Dec. 31, 2021 | 142,863 | ||||
Balances beginning (in shares) at Dec. 31, 2021 | 2,869 | ||||
Balances beginning at Dec. 31, 2021 | $ 1 | $ 552,923 | $ (775,937) | $ (24,167) | $ (247,180) |
Share-based compensation | 5,179 | 5,179 | |||
Stock issued (in shares) | 299 | ||||
Shares withheld related to net settlement of equity awards | (716) | (716) | |||
Net income | 187,700 | 187,700 | |||
Balances Ending (in shares) at Sep. 30, 2022 | 143,162 | ||||
Balances Ending (in shares) at Sep. 30, 2022 | 2,869 | ||||
Balances Ending at Sep. 30, 2022 | $ 1 | 557,386 | (588,237) | $ (24,167) | (55,017) |
Balances beginning (in shares) at Jun. 30, 2022 | 143,155 | ||||
Balances beginning (in shares) at Jun. 30, 2022 | 2,869 | ||||
Balances beginning at Jun. 30, 2022 | $ 1 | 554,755 | (654,958) | $ (24,167) | (124,369) |
Share-based compensation | 2,645 | 2,645 | |||
Stock issued (in shares) | 7 | ||||
Shares withheld related to net settlement of equity awards | (14) | (14) | |||
Net income | 66,721 | 66,721 | |||
Balances Ending (in shares) at Sep. 30, 2022 | 143,162 | ||||
Balances Ending (in shares) at Sep. 30, 2022 | 2,869 | ||||
Balances Ending at Sep. 30, 2022 | $ 1 | 557,386 | (588,237) | $ (24,167) | $ (55,017) |
Balances beginning (in shares) at Dec. 31, 2022 | 146,133 | ||||
Balances beginning (in shares) at Dec. 31, 2022 | 2,869 | 2,869 | |||
Balances beginning at Dec. 31, 2022 | $ 1 | 576,588 | (544,788) | $ (24,167) | $ 7,634 |
Share-based compensation | 7,259 | 7,259 | |||
Stock issued (in shares) | 442 | ||||
Shares withheld related to net settlement of equity awards | (947) | (947) | |||
Net income | 16,041 | $ 16,041 | |||
Balances Ending (in shares) at Sep. 30, 2023 | 146,575 | ||||
Balances Ending (in shares) at Sep. 30, 2023 | 2,869 | 2,869 | |||
Balances Ending at Sep. 30, 2023 | $ 1 | 582,900 | (528,747) | $ (24,167) | $ 29,987 |
Balances beginning (in shares) at Jun. 30, 2023 | 146,481 | ||||
Balances beginning (in shares) at Jun. 30, 2023 | 2,869 | ||||
Balances beginning at Jun. 30, 2023 | $ 1 | 579,849 | (530,892) | $ (24,167) | 24,791 |
Share-based compensation | 3,250 | 3,250 | |||
Stock issued (in shares) | 94 | ||||
Shares withheld related to net settlement of equity awards | (199) | (199) | |||
Net income | 2,145 | $ 2,145 | |||
Balances Ending (in shares) at Sep. 30, 2023 | 146,575 | ||||
Balances Ending (in shares) at Sep. 30, 2023 | 2,869 | 2,869 | |||
Balances Ending at Sep. 30, 2023 | $ 1 | $ 582,900 | $ (528,747) | $ (24,167) | $ 29,987 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Operating activities: | ||
Net income | $ 16,041 | $ 187,700 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation, depletion, amortization and accretion | 102,660 | 99,384 |
Share-based compensation | 7,259 | 5,179 |
Amortization and write off of debt issuance costs | 5,714 | 6,114 |
Derivative (gain) loss | (41,560) | 109,892 |
Derivative cash payments, net | (6,123) | (1,022) |
Derivative cash premium payments | (46,111) | |
Deferred income taxes | 14,647 | 40,171 |
Changes in operating assets and liabilities: | ||
Oil and natural gas receivables | 17,624 | (34,276) |
Joint interest receivables | (2,049) | (7,070) |
Prepaid expenses and other current assets | 25,550 | (26,816) |
Accounts payable, accrued liabilities and other | (34,475) | 65,566 |
Asset retirement obligation settlements | (24,918) | (61,285) |
Cash advances from JV partners | (74) | (12,055) |
Income taxes payable | (634) | 1,480 |
Net cash provided by operating activities | 79,662 | 326,851 |
Investing activities: | ||
Investment in oil and natural gas properties and equipment | (30,959) | (29,966) |
Changes in operating assets and liabilities associated with investing activities | 1,285 | (8,237) |
Acquisition of property interests | (28,863) | (51,474) |
Deposit related to acquisition of property interests | (8,850) | |
Purchase of corporate aircraft (Note 13) | (8,983) | |
Purchases of furniture, fixtures and other | (3,081) | |
Net cash used in investing activities | (79,451) | (89,677) |
Financing activities: | ||
Repayment of 9.75% Senior Second Lien Notes due 2023 | (552,460) | |
Repayment of Term Loan | (26,329) | (33,837) |
Repayment of TVPX Loan | (458) | |
Proceeds from issuance of 11.75% Senior Second Lien Notes due 2026 | 275,000 | |
Debt issuance costs | (7,380) | (1,290) |
Other | (948) | (716) |
Net cash used in financing activities | (312,575) | (35,843) |
Change in cash, cash equivalents and restricted cash | (312,364) | 201,331 |
Cash and cash equivalents and restricted cash, beginning of period | 465,774 | 250,216 |
Cash and cash equivalents and restricted cash, end of period | $ 153,410 | $ 451,547 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Parentheticals) | Sep. 30, 2023 | Feb. 08, 2023 | Jan. 27, 2023 | Dec. 31, 2022 | Sep. 30, 2022 |
9.75% Senior Second Lien Notes due 2023 | |||||
Debt instrument, interest rate, stated percentage | 9.75% | 9.75% | 9.75% | 9.75% | |
11.75% Senior Second Lien Notes due 2026 | |||||
Debt instrument, interest rate, stated percentage | 11.75% | 11.75% | 11.75% | 11.75% | 11.75% |
BASIS OF PRESENTATION AND SIGNI
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Sep. 30, 2023 | |
Notes to Financial Statements | |
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES | NOTE 1 — Nature of Operations W&T Offshore, Inc. (with subsidiaries referred to herein as “W&T” or the “Company”) is an independent oil and natural gas producer with substantially all of its operations offshore in the Gulf of Mexico. The Company is active in the exploration, development and acquisition of oil and natural gas properties. The Company operates in one reportable segment. Basis of Presentation The accompanying unaudited condensed consolidated financial statements include the accounts of the Company, its wholly-owned subsidiaries and an interest in Monza Energy LLC (“Monza”), which is accounted for under the proportional consolidation method. All intercompany accounts and transactions have been eliminated in consolidation. These condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Accordingly, certain information and disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been condensed or omitted. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for interim periods are not necessarily indicative of the results that may be expected for the entire year. These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes included in Item 8 “Financial Statements and Supplementary Data” of the Company’s Annual Report on Form 10-K for the year ended December 31, 2022 (the “2022 Annual Report”). Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, the reported amounts of revenues and expenses during the reporting periods and the reported amounts of proved oil and natural gas reserves. Actual results could differ from those estimates. Allowance for Credit Losses The Company has receivables related to joint interest arrangements primarily with mid-size oil and natural gas companies with a substantial majority of the net receivable balance concentrated in less than ten companies. A loss methodology is used to develop the allowance for credit losses on material receivables to estimate the net amount to be collected. The loss methodology uses historical data, current market conditions and forecasts of future economic conditions. The Company’s maximum exposure at any time would be the receivable balance. Joint interest receivables on the Condensed Consolidated Balance Sheets are presented net of allowance for credit losses of $11.2 million and $12.1 million as of September 30, 2023 and December 31, 2022, respectively. Employee Retention Credit Under the Consolidated Appropriations Act of 2021, the Company recognized a $2.2 million employee retention credit during the nine months ended September 30, 2023, which is included as a credit to General and administrative expenses Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets consist of the following (in thousands): September 30, December 31, 2023 2022 Derivatives (1) $ 1,294 $ 4,954 Insurance/bond premiums 8,955 6,046 Deposit related to acquisition (Note 14) 8,850 — Prepaid deposits related to royalties 7,322 9,139 Prepayments to vendors 1,520 1,767 Prepayments to joint interest partners 2,242 1,717 Current portion of debt issuance costs 213 687 Other 80 33 Prepaid expenses and other current assets $ 30,476 $ 24,343 (1) Includes closed contracts which have not yet settled. Oil and Natural Gas Properties and Other, Net Oil and natural gas properties and other, net consist of the following (in thousands): September 30, December 31, 2023 2022 Oil and natural gas properties and equipment $ 8,908,490 $ 8,813,404 Furniture, fixtures and other 43,087 20,915 Total property and equipment 8,951,577 8,834,319 Less: Accumulated depreciation, depletion, amortization and impairment (8,180,123) (8,099,104) Oil and natural gas properties and other, net $ 771,454 $ 735,215 Other Assets Other assets consist of the following (in thousands): September 30, December 31, 2023 2022 Operating lease right-of-use assets $ 10,623 $ 10,364 Investment in White Cap, LLC 2,924 2,453 Proportional consolidation of Monza 10,805 9,321 Derivatives (1) 14,372 23,236 Other 1,662 2,175 Total other assets $ 40,386 $ 47,549 (1) Includes open contracts. Accrued Liabilities Accrued liabilities consist of the following (in thousands): September 30, December 31, 2023 2022 Accrued interest $ 5,430 $ 8,967 Accrued salaries/payroll taxes/benefits 9,065 15,097 Litigation accruals 56 396 Operating lease liabilities 871 1,628 Derivatives (1) 17,659 46,595 Other 1,183 1,358 Total accrued liabilities $ 34,264 $ 74,041 (1) Includes closed contracts which have not yet settled . Other Liabilities Other liabilities consist of the following (in thousands): September 30, December 31, 2023 2022 Dispute related to royalty deductions $ 5,250 $ 4,937 Derivatives 11,790 43,061 Operating lease liabilities 11,700 10,527 Other 708 609 Total other liabilities $ 29,448 $ 59,134 |
DEBT
DEBT | 9 Months Ended |
Sep. 30, 2023 | |
Notes to Financial Statements | |
DEBT | NOTE 2 — The components comprising the Company’s debt are presented in the following table (in thousands): September 30, December 31, 2023 2022 TVPX Loan: Principal $ 11,300 $ — Unamortized discount (1,434) — Unamortized debt issuance costs (246) — Total 9,620 — Term Loan: Principal 121,571 147,899 Unamortized debt issuance costs (3,337) (4,592) Total 118,234 143,307 Credit Agreement — — 11.75% Senior Second Lien Notes due 2026: Principal 275,000 — Unamortized debt issuance costs (5,695) — Total 269,305 — 9.75% Senior Second Lien Notes due 2023: Principal — 552,460 Unamortized debt issuance costs — (2,330) Total — 550,130 Total debt, net 397,159 693,437 Less current portion, net (30,015) (582,249) Long-term debt, net $ 367,144 $ 111,188 Current Portion of Long-Term Debt, Net As of September 30, 2023, the current portion of long-term debt of $30.0 million represented principal payments due within one year on the TVPX Loan and Term Loan (defined below), net of current unamortized debt issuance costs. TVPX Loan On May 15, 2023, the Company acquired a corporate aircraft from a company affiliated with and controlled by Chairman, Chief Executive Officer (“CEO”) and President Note 13 Related Party Transactions The purchase price of the aircraft was $19.1 million, which was paid using $9.0 million of the Company’s cash on hand and through the assumption of an approximately $11.8 million amortizing loan by TVPX Aircraft Solutions Inc. (the “TVPX Loan”), not in its individual capacity but as owner trustee of the trust which holds title to the aircraft, a wholly owned indirect subsidiary of the Company, as the borrower. The TVPX Loan bears a fixed interest rate of 2.49% per annum for a term of 41 months and requires monthly amortization payments of $91.7 thousand plus accrued interest, and a balloon payment of $8.0 million at the end of the loan term. The TVPX Loan is guaranteed by the Company on an unsecured basis. At the date of assumption, the Company determined that the fair market value of the TVPX Loan was $10.1 million using current market rates. The aircraft was purchased as part of a series of transactions pursuant to which the Company restructured the compensation for its Named Executive Officers. Prior to the Company’s purchase of the aircraft, the Company used the aircraft for business purposes, and the CEO also used the aircraft for personal purposes. Both the Company’s use for business purposes and the CEO’s unlimited use for personal purposes were paid for by the Company pursuant to the CEO’s prior employment agreement. In connection with the Company’s efforts to significantly reduce overall executive compensation, including perquisite compensation Mr. Krohn was receiving for personal use of the aircraft, on April 20, 2023, the Company entered into an amendment to the employment agreement with the CEO which requires that the Company be reimbursed for personal use of the aircraft in accordance with the Company’s aircraft use policy. Term Loan The Term Loan requires quarterly amortization payments and bears interest at a fixed rate of 7.0% per annum. The Subsidiary Credit Agreement required the Company to enter into certain natural gas swaps and put derivative contracts (see Note 4 – Derivative Financial Instruments) Note 6 Subsidiary Borrowers Credit Agreement The Company entered into a Credit Agreement with Calculus Lending, LLC (“Calculus”), a company affiliated with and controlled by the Company’s CEO, as sole lender under the Credit Agreement (as amended from time to time, the “Credit Agreement”). The Credit Agreement currently has a maturity date of ● $100 million first priority lien secured revolving credit facility, with borrowings limited to a borrowing base of $50.0 million; ● Outstanding borrowings accrue interest at SOFR plus 6.0% per annum; ● The Company’s ratio of First Lien Debt (as such term is defined in the Credit Agreement) outstanding under the Credit Agreement on the last day of the most recent quarter to EBITDAX (as such term is defined in the Credit Agreement) for the trailing four quarters must not be greater than 2.50 to 1.00; ● The Company’s ratio of Total Proved PV-10 to First Lien Debt (as such terms are defined in the Credit Agreement) as of the last day of any fiscal quarter must be equal to or greater than 2.00 to 1.00; ● The ratio of the Company and its restricted subsidiaries’ consolidated current assets to consolidated current liabilities (subject in each case to certain exceptions and adjustments as set forth in the Credit Agreement) at the last day of any fiscal quarter must be greater than or equal to 1.00 to 1.00; ● As of the last day of any fiscal quarter, the Company and its restricted subsidiaries on a consolidated basis must pass a “Stress Test” to determine whether certain future net revenues from the Company’s and its restricted subsidiaries’ and certain joint ventures’ oil and gas properties included in the collateral are sufficient to satisfy the aggregate first lien indebtedness under the Credit Agreement assuming the Borrowing Base is 100% funded or fully utilized; and ● Certain related party transactions are required to meet certain arm’s length criteria; except in each case as specifically permitted or excluded from the covenant under the Credit Agreement. Availability under the Credit Agreement is subject to redetermination of the borrowing base that may be requested at the discretion of either the lender or the Company in accordance with the Credit Agreement. Note 6 – Subsidiary Borrowers As of September 30, 2023, there were no borrowings outstanding under the Credit Agreement and no borrowings had been incurred under the Credit Agreement during the nine months ended September 30, 2023. As of September 30, 2023 and December 31, 2022, the Company had $4.4 million outstanding in letters of credit which have been cash collateralized. 11.75% Senior Second Lien Notes due 2026 On January 27, 2023, the Company issued at par $275 million in aggregate principal amount of its 11.75% Senior Second Lien Notes (the “11.75% Notes”) under an indenture dated January 27, 2023 (the “Indenture”). The 11.75% Notes mature on February 1, 2026, and interest is payable in arrears on February 1 and August 1. The 11.75% Notes are secured by second-priority liens on the same collateral that is secured under the Credit Agreement, which does not include the assets of the Subsidiary Borrowers (as described in Note 6 – Subsidiary Borrowers Prior to August 1, 2024, the Company may redeem all or any portion of the 11.75% Notes at a redemption price equal to 100% of the principal amount of the notes outstanding plus accrued and unpaid interest, if any, to the redemption date, plus the “Applicable Premium” (as defined in the Indenture). In addition, prior to August 1, 2024, the Company may, at its option, on one or more occasions redeem up to 35% of the aggregate original principal amount of the 11.75% Notes in an amount not greater than the net cash proceeds from certain equity offerings at a redemption price of 111.750% of the principal amount of the outstanding plus accrued and unpaid interest, if any, to the redemption date. On and after August 1, 2024, the Company may redeem the 11.75% Notes, in whole or in part, at redemption prices (expressed as percentages of the principal amount thereof) equal to 105.875% for the 12-month period beginning August 1, 2024, and 100.000% on August 1, 2025 and thereafter, plus accrued and unpaid interest, if any, to the redemption date. The 11.75% Notes are guaranteed by the Guarantors. The 11.75% Notes contain covenants that limit or prohibit the Company’s ability and the ability of certain of its subsidiaries to: (i) make investments; (ii) incur additional indebtedness or issue certain types of preferred stock; (iii) create certain liens; (iv) sell assets; (v) enter into agreements that restrict dividends or other payments from the Company’s subsidiaries to the Company; (vi) consolidate, merge or transfer all or substantially all of the assets of the Company; (vii) engage in transactions with affiliates; (viii) pay dividends or make other distributions on capital stock or subordinated indebtedness; and (ix) create subsidiaries that would not be restricted by the covenants of the Indenture. These covenants are subject to important exceptions and qualifications set forth in the Indenture. In addition, most of the above-described covenants will terminate if both S&P Global Ratings, a division of S&P Global Inc., and Moody’s Investors Service, Inc. assign the 11.75% Notes an investment grade rating and no default exists with respect to the 11.75% Notes. Redemption of 9.75% Senior Second Lien Notes due 2023 On February 8, 2023, the Company redeemed all of the $552.5 million of aggregate principal outstanding of its 9.75% Senior Second Lien Notes (the 9.75% Notes”) at a redemption price of 100.0%, plus accrued and unpaid interest to the redemption date. The Company used the net proceeds of $270.8 million from the issuance of the 11.75% Notes and cash on hand of $296.1 million to fund the redemption. Covenants As of September 30, 2023 and for all prior measurement periods presented, the Company was in compliance with all applicable covenants of the Credit Agreement and the Indenture. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 9 Months Ended |
Sep. 30, 2023 | |
Notes to Financial Statements | |
FAIR VALUE MEASUREMENTS | NOTE 3 — Derivative Financial Instruments Derivative financial instruments are reported in the Condensed Consolidated Balance Sheets using fair value. See Note 4 – Derivative Financial Instruments September 30, December 31, 2023 2022 Assets: Derivative instruments - current $ 1,294 $ 4,954 Derivative instruments - long-term 14,372 23,236 Liabilities: Derivative instruments - current 17,659 46,595 Derivative instruments - long-term 11,790 43,061 The Company measures the fair value of derivative financial instruments by applying the income approach, using models with inputs that are classified within Level 2 of the valuation hierarchy. The income approach converts expected future cash flows to a present value amount based on market expectations. The inputs used for the fair value measurement of derivative financial instruments are the exercise price, the expiration date, the settlement date, notional quantities, the implied volatility, the discount curve with spreads and published commodity future prices. Debt Instruments The following table presents the net value and fair value of the Company’s debt (in thousands): September 30, 2023 December 31, 2022 Net Value Fair Value Net Value Fair Value TVPX Loan $ 9,620 $ 9,783 $ — $ — Term Loan 118,234 113,478 143,307 139,056 11.75% Notes 269,305 283,580 — — 9.75% Notes — — 550,130 544,902 Total $ 397,159 $ 406,841 $ 693,437 $ 683,958 The fair value of the TVPX Loan and the Term Loan were measured using a discounted cash flows model and current market rates. The fair value of the 11.75% Notes and 9.75% Notes were measured using quoted prices, although the market is not a highly liquid market. The fair value of debt was classified as Level 2 within the valuation hierarchy. |
DERIVATIVE FINANCIAL INSTRUMENT
DERIVATIVE FINANCIAL INSTRUMENTS | 9 Months Ended |
Sep. 30, 2023 | |
Notes to Financial Statements | |
DERIVATIVE FINANCIAL INSTRUMENTS | NOTE 4 — DERIVATIVE FINANCIAL INSTRUMENTS W&T’s market risk exposure relates primarily to commodity prices. The Company attempts to mitigate a portion of its commodity price risk and stabilize cash flows associated with sales of oil and natural gas production through the use of oil and natural gas swaps, costless collars, sold calls and purchased puts. W&T has elected not to designate commodity derivative contracts for hedge accounting. Accordingly, commodity derivatives are recorded on the Condensed Consolidated Balance Sheets at fair value with settlements of such contracts, and changes in the unrealized fair value, recorded as Derivative (gain) loss, net on the Condensed Consolidated Statements of Operations in each period presented. The natural gas contracts are based off the Henry Hub prices, which is quoted off the New York Mercantile Exchange (“NYMEX”). The following table reflects the contracted volumes and weighted average prices under the terms of the Company’s open derivative contracts as of September 30, 2023: Average Instrument Daily Total Weighted Weighted Weighted Period Type Volumes Volumes Strike Price Put Price Call Price Natural Gas - Henry Hub (NYMEX) (MMbtu) (1) (MMbtu) (1) ($/MMbtu) (1) ($/MMbtu) (1) ($/MMbtu) (1) Oct 2023 - Dec 2023 calls 70,000 6,440,000 $ — $ — $ 7.50 Jan 2024 - Dec 2024 calls 65,000 23,790,000 $ — $ — $ 6.13 Jan 2025 - Mar 2025 calls 62,000 5,580,000 $ — $ — $ 5.50 Oct 2023 - Dec 2023 (2) swaps 71,739 6,600,000 $ 2.50 $ — $ — Jan 2024 - Dec 2024 (2) swaps 65,573 24,000,000 $ 2.46 $ — $ — Jan 2025 - Mar 2025 (2) swaps 63,333 5,700,000 $ 2.72 $ — $ — Apr 2025 - Dec 2025 (2) puts 62,183 17,100,000 $ — $ 2.27 $ — Jan 2026 - Dec 2026 (2) puts 55,895 20,400,000 $ — $ 2.35 $ — Jan 2027 - Dec 2027 (2) puts 52,607 19,200,000 $ — $ 2.37 $ — Jan 2028 - Apr 2028 (2) puts 49,725 6,000,000 $ — $ 2.42 $ — (1) MMbtu – Million British Thermal Units (2) These contracts were entered into by Aquasition LLC in conjunction with the Term Loan (see Note 6 – Subsidiary Borrowers ) . Financial Statement Presentation The fair value of the Company’s derivative financial instruments was recorded in the Condensed Consolidated Balance Sheets as follows (in thousands): September 30, December 31, 2023 2022 Prepaid expenses and other current assets $ 1,294 $ 4,954 Other assets 14,372 23,236 Accrued liabilities 17,659 46,595 Other liabilities 11,790 43,061 Although the Company has master netting arrangements with its counterparties, t The impact of commodity derivative contracts on the Condensed Consolidated Statements of Operations were as follows (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Realized loss (1) $ 1,971 $ 132,289 $ 2,501 $ 96,315 Unrealized (gain) loss (3,462) (93,540) (44,061) 13,577 Derivative (gain) loss, net $ (1,491) $ 38,749 $ (41,560) $ 109,892 (1) The nine months ended September 30, 2022 includes the effect of the $138.0 million realized gain related to the monetization of certain natural gas call contracts through restructuring of strike prices. Cash payments on commodity derivative contract settlements, net, are included within Net cash provided by operating activities Nine Months Ended September 30, 2023 2022 Derivative (gain) loss $ (41,560) $ 109,892 Derivative cash payments, net (1) (6,123) (1,022) Derivative cash premium payments, net — (46,111) (1) The nine months ended September 30, 2022 includes $105.3 million of net cash receipts related to the monetization of certain natural gas call contracts through restructuring of strike prices. |
ACQUISITION
ACQUISITION | 9 Months Ended |
Sep. 30, 2023 | |
ACQUISITION | |
ACQUISITION | NOTE 5 — On September 20, 2023, the Company entered into a purchase and sale agreement to acquire working interests in certain oil and natural gas producing properties in eight shallow water oil and natural gas producing assets in the central and eastern shelf region of Gulf of Mexico for $32.0 million. The transaction closed on September 20, 2023, and after normal and customary post-effective date adjustments (including net operating cash flow attributable to the properties from the effective date of June 1, 2023 to the close date), cash consideration of $28.9 million was paid to the sellers. The transaction was funded using cash on hand. The Company also assumed the related asset retirement obligations (“AROs”) associated with these assets. The acquisition was accounted for as an asset acquisition, which requires that the total purchase price, including transaction costs, be allocated to the assets acquired and the liabilities assumed based on their relative fair values. The fair value measurements of the oil and natural gas properties acquired and ARO assumed were derived utilizing an income approach and based, in part, on significant inputs not observable in the market. These inputs represent Level 3 measurements in the fair value hierarchy and include, but are not limited to, estimates of reserves, future operating and development costs, future commodity prices, estimated future cash flows and appropriate discount rates. These inputs required significant judgments and estimates by the Company’s management at the time of the valuation. The following table represents the Company’s preliminary allocation of total purchase consideration to the identifiable assets acquired and liabilities assumed based on the fair values on the date of acquisition (in thousands): Oil and natural gas properties and other, net $ 45,215 Asset retirement obligations (16,352) Allocated purchase price $ 28,863 |
SUBSIDIARY BORROWERS
SUBSIDIARY BORROWERS | 9 Months Ended |
Sep. 30, 2023 | |
SUBSIDIARY BORROWERS | |
SUBSIDIARY BORROWERS | NOTE 6 — SUBSIDIARY BORROWERS The Subsidiary Borrowers used the net proceeds from the Term Loan (see Note 2 – Debt The Subsidiary Borrowers are wholly-owned subsidiaries of the Company; however, the assets of the Subsidiary Borrowers are not available to satisfy the debt or contractual obligations of any other entities, including debt securities or other contractual obligations of the Company, and the Subsidiary Borrowers do not bear any liability for the indebtedness or other contractual obligations of any other entities, and vice versa. During the year ended December 31, 2022, the Subsidiary Borrowers paid cash distributions to W&T of $30.2 million. During the nine months ended September 30, 2023, no such distributions were paid. Consolidation and Carrying Amounts The following table presents the amounts recorded by the Company on the Condensed Consolidated Balance Sheets related to the consolidation of the Subsidiary Borrowers and the Subsidiary Parent (in thousands): September 30, December 31, 2023 2022 Assets: Cash and cash equivalents $ 1,408 $ 21,764 Receivables: Oil and natural gas sales 22,988 37,344 Joint interest, net (25,446) (5,760) Prepaid expenses and other assets (55) 417 Oil and natural gas properties and other, net 290,686 280,649 Other assets 9,328 8,473 Liabilities: Accounts payable 10,432 27,387 Undistributed oil and natural gas proceeds 4,480 7,930 Accrued liabilities 17,982 45,102 Current portion of long-term debt, net 29,451 32,119 Long-term debt, net 88,783 111,188 Asset retirement obligations 67,402 61,138 Other liabilities 16,531 47,398 The following table presents the amounts recorded by the Company in the Condensed Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Total revenues $ 28,865 $ 94,264 $ 75,425 $ 218,625 Total operating expenses 18,807 19,776 69,297 52,961 Interest expense, net 2,536 3,405 7,947 11,841 Derivative (gain) loss (2,652) 55,850 (55,041) 187,896 |
JOINT VENTURE DRILLING PROGRAM
JOINT VENTURE DRILLING PROGRAM | 9 Months Ended |
Sep. 30, 2023 | |
Notes to Financial Statements | |
JOINT VENTURE DRILLING PROGRAM | NOTE 7 — JOINT VENTURE DRILLING PROGRAM In March 2018, W&T and other members formed and funded Monza, which jointly participates with the Company in the exploration, drilling and development of certain drilling projects (the “Joint Venture Drilling Program”) in the Gulf of Mexico. The total commitments by all members, including W&T’s commitment to fund its retained interest in Monza projects held outside of Monza, was $361.4 million. W&T contributed 88.94% of its working interest in certain identified undeveloped drilling projects to Monza and retained 11.06% of its working interest. The Joint Venture Drilling Program is structured so that W&T initially receives an aggregate of 30.0% of the revenues less expenses, through the direct ownership from the retained working interest in the Monza projects and the Company’s indirect interest through its interest in Monza, for contributing 20.0% of the estimated total well costs plus associated leases and providing access to available infrastructure at agreed-upon rates. Any exceptions to this structure are approved by the Monza board of directors. The members of Monza are third-party investors, W&T and an entity owned and controlled by W&T’s CEO. The entity affiliated with the Company’s CEO invested as a minority investor on the same terms and conditions as the third-party investors. Its investment is limited to 4.5% of total invested capital within Monza, and it made a capital commitment to Monza of $14.5 million. Monza is an entity separate from any other entity with its own separate creditors who will be entitled, upon its liquidation, to be satisfied out of Monza’s assets prior to any value in Monza becoming available to holders of its equity. The assets of Monza are not available to pay creditors of the Company and its affiliates. Through September 30, 2023, ten wells have been completed since the inception of the Joint Venture Drilling Program, and W&T is the operator for eight of these wells. Since inception through September 30, 2023, members of Monza have made partner capital contributions, including W&T’s contributions of working interest in the drilling projects, to Monza totaling $302.4 million and received cash distributions totaling $206.4 million. Since inception through September 30, 2023, W&T has made capital contributions, including the contributions of working interest in the drilling projects, to Monza totaling $68.2 million and received cash distributions totaling $44.5 million. Consolidation and Carrying Amounts W&T’s interest in Monza is considered to be a variable interest that is proportionally consolidated. Through September 30, 2023, there have been no events or changes that would cause a redetermination of the variable interest status. W&T does not fully consolidate Monza because the Company is not considered the primary beneficiary of Monza. The following table presents the amounts recorded by W&T on the Condensed Consolidated Balance Sheets related to the consolidation of the proportional interest in Monza’s operations (in thousands): September 30, December 31, 2023 2022 Working capital $ 1,471 $ 2,515 Oil and natural gas properties and other, net 33,104 37,260 Asset retirement obligations 572 467 Other assets 10,805 11,571 As required, W&T may call on Monza to provide cash to fund its portion of certain Joint Venture Drilling Program projects in advance of capital expenditure spending. As of September 30, 2023 and December 31, 2022, the unused advances were $2.8 million and $2.9 million, respectively, which are included in Advances from joint interest partners . The following table presents the amounts recorded by W&T in the Condensed (i Nine Months Ended September 30, 2023 2022 Total revenues $ 9,635 $ 23,681 Total operating expenses 7,046 10,805 Interest income 147 — |
ASSET RETIREMENT OBLIGATIONS
ASSET RETIREMENT OBLIGATIONS | 9 Months Ended |
Sep. 30, 2023 | |
Notes to Financial Statements | |
ASSET RETIREMENT OBLIGATIONS | NOTE 8 — AROs represent the estimated present value of the amount incurred to plug, abandon and remediate the Company’s properties at the end of their productive lives. A summary of the changes to ARO is as follows (in thousands): Nine Months Ended September 30, 2023 2022 Asset retirement obligations, beginning of period $ 466,429 $ 424,495 Liabilities settled (24,918) (61,285) Accretion expense 21,641 19,536 Liabilities acquired 16,352 33,202 Liabilities incurred 113 138 Revisions of estimated liabilities 18,797 37,524 Asset retirement obligations, end of period 498,414 453,610 Less: Current portion (33,169) (54,886) Long-term $ 465,245 $ 398,724 |
SHARE-BASED AWARDS AND CASH-BAS
SHARE-BASED AWARDS AND CASH-BASED INCENTIVE COMPENSATION | 9 Months Ended |
Sep. 30, 2023 | |
Notes to Financial Statements | |
SHARE-BASED AWARDS AND CASH-BASED INCENTIVE COMPENSATION | NOTE 9 — SHARE-BASED AWARDS AND CASH-BASED INCENTIVE COMPENSATION On June 16, 2023, the 2023 Incentive Compensation Plan (the “2023 Plan”) was approved by the Company’s shareholders. The 2023 Plan is effective June 16, 2023, and the Company will no longer grant awards pursuant to the W&T Offshore, Inc. Amended and Restated Incentive Compensation Plan, as amended from time to time, or the 2004 Directors Compensation Plan of W&T Offshore, Inc., as amended from time to time stock appreciation rights, restricted stock (“RSAs”), restricted stock units (“RSUs”), performance awards (“PSUs”), stock awards, dividend equivalents, other stock-based awards, performance units or shares, cash awards, substitute awards or any combination of the foregoing to eligible employees, non-employee directors, and consultants. Any awards granted prior to the effective date of the 2023 Plan are considered to have been granted under the applicable Prior Plan. Share-Based Awards Restricted Stock Units During 2023, the Company granted RSUs to certain employees and non-employee directors under both the 2023 Plan and the Prior Plan. The RSUs granted to employees are a long-term compensation component, subject to service conditions, and generally vest in three equal annual installments. The fair value of the RSUs granted to employees on the date of grant was $6.6 million. The RSUs granted to non-employee directors generally vest one year from the date of the grant or on the date of W&T’s next annual shareholder meeting, subject to certain conditions. The fair value of the RSUs granted to non-employee directors on the date of grant was $0.6 million. A summary of activity related to RSUs during the nine months ended September 30, 2023 is as follows: Weighted Average Grant Date Restricted Fair Value Stock Units per Unit Nonvested, beginning of period 1,221,461 $ 5.76 Granted 1,785,960 4.06 Vested (486,134) 5.62 Forfeited (111,717) 5.72 Nonvested, end of period 2,409,570 4.53 Performance Share Units In June 2023, the Company granted PSUs to certain employees under both the 2023 Plan and the Prior Plan. These PSUs vest subject to ranking against peer companies’ TSR , which ends on December 31, 2025. As these PSUs had both service and market conditions, the Company estimated the fair value of these PSUs using the Monte Carlo simulation model. The fair value of the PSUs on the date of grant was $6.3 million. A summary of activity related to PSUs during the nine months ended September 30, 2023 is as follows: Weighted Average Grant Date Performance Fair Value Share Units per Unit Nonvested, beginning of period 1,502,239 $ 9.78 Granted 1,289,720 4.85 Vested (9,308) 8.13 Forfeited (231,175) 9.69 Nonvested, end of period 2,551,476 7.30 The following table summarizes the assumptions used in the Monte Carlo simulation model to calculate the fair value of the PSUs granted: Expected term for performance period (in years) 2.6 Expected volatility 76.1 % Risk-free interest rate 4.2 % Share-Based Awards to Non-Employee Directors Under the Prior Plan, the Company issued RSAs to non-employee directors. These RSAs vested over a one-year period. There were no RSAs granted to non-employee directors during the nine months ended September 30, 2023. The non-employee directors were granted RSUs in July 2023 under the 2023 Plan. A summary of activity related to restricted shares during the nine months ended September 30, 2023 is as follows: Weighted Average Grant Date Restricted Fair Value Shares per Share Nonvested, beginning of period 42,426 $ 4.95 Granted — — Vested (42,426) 4.95 Nonvested, end of period — — Share-Based Compensation Expense The following table presents the compensation costs General and administrative expenses in the Condensed Consolidated Statements of Operations (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Restricted stock units $ 1,506 $ 1,240 $ 2,949 $ 2,852 Performance share units 1,744 1,352 4,240 2,154 Restricted shares — 53 70 173 Total $ 3,250 $ 2,645 $ 7,259 $ 5,179 Cash-Based Incentive Compensation In addition to share-based awards, the Company also grants short-term cash-based incentive awards to all eligible employees. These awards provide for an annual cash payment equal to an established target cash incentive amount multiplied by a target performance score for the Company (as determined by a set of pre-defined performance metrics) and multiplied by an individual performance multiplier for all eligible employees except Named Executive Officers. The following table presents the cash-based incentive compensation costs in the Condensed Consolidated Statements of Operations (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Lease operating expenses $ 1,142 $ 1,532 $ 2,710 $ 1,994 General and administrative expenses 2,609 3,559 9,478 6,164 Total $ 3,751 $ 5,091 $ 12,188 $ 8,158 |
INCOME TAXES
INCOME TAXES | 9 Months Ended |
Sep. 30, 2023 | |
Notes to Financial Statements | |
INCOME TAXES | NOTE 10 — Tax Expense and Effective Tax Rate For the three months ended September 30, 2023 and 2022, the Company recognized income tax expense of $4.8 million and $16.4 million, respectively. The effective tax rate for the three months ended September 30, 2023 is not meaningful primarily as a result of changes in the valuation allowance on the Company’s deferred tax assets. For the three months ended September 30, 2022, the effective tax rate was 19.7%. For the nine months ended September 30, 2023 and 2022, the Company recognized income tax expense of $16.4 million and $46.8 million, respectively, for an effective tax rate of 50.6% and 20.0%, respectively. For both the three and nine months ended September 30, 2023, the Company’s effective tax rate differed from the statutory federal tax rate primarily due to the impact of state income taxes, nondeductible compensation, and adjustments to the valuation allowance. For both the three and nine months ended September 30, 2022, the Company’s effective tax rate differed from the statutory federal tax rate primarily due to the impact of state income taxes and adjustments to the valuation allowance. Valuation Allowance Deferred tax assets are recorded related to net operating losses and temporary differences between the book and tax basis of assets and liabilities expected to produce tax deductions in future periods. The realization of the Company’s deferred tax assets depends on recognition of sufficient future taxable income in specific tax jurisdictions in which those temporary differences or net operating losses are deductible. In assessing the need for a valuation allowance on deferred tax assets, the Company considers whether it is more likely than not that some portion or all of them will not be realized. As of September 30, 2023 and December 31, 2022, the valuation allowance was $21.7 million and $15.3 million, respectively, and relates primarily to state net operating losses and the disallowed interest expense limitation carryover. Income Taxes Receivable, Refunds and Payments As of September 30, 2023, the Company has a federal income tax receivable of $0.2 million and state income tax receivable of $0.1 million. As of December 31, 2022, the Company did not have any outstanding current income taxes receivable. During the nine months ended September 30, 2023, the Company did not receive any income tax refunds and made federal income tax payments of $2.2 million and state income tax payments of $0.3 million. The tax years 2019 through 2022 remain open to examination by the tax jurisdictions to which the Company is subject. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 9 Months Ended |
Sep. 30, 2023 | |
Notes to Financial Statements | |
EARNINGS PER SHARE | NOTE 11 — EARNINGS PER SHARE The following table presents the calculation of basic and diluted (loss) earnings per common share (in thousands, except per share amounts): Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Net income $ 2,145 $ 66,721 $ 16,041 $ 187,700 Weighted average common shares outstanding - basic 146,483 143,116 146,451 143,026 Dilutive effect of securities 4,976 2,766 3,405 1,670 Weighted average common shares outstanding - diluted 151,459 145,882 149,856 144,696 Earnings per common share: Basic $ 0.01 $ 0.46 $ 0.11 $ 1.30 Diluted 0.01 0.46 0.11 1.30 |
CONTINGENCIES
CONTINGENCIES | 9 Months Ended |
Sep. 30, 2023 | |
Notes to Financial Statements | |
CONTINGENCIES | NOTE 12 — Appeal with the Office of Natural Resources Revenue , , The Company has continued to pursue its legal rights and, at present, the case is in front of the U.S. District Court for the Eastern District of Louisiana where both parties have filed cross-motions for summary judgment and opposition briefs. W&T has filed a Reply in support of its Motion for Summary Judgment and the government has in turn filed its Reply brief. With briefing now completed, the Company is waiting for the district court’s ruling on the merits. ONRR Audit of Historical Refund Claims O Civil Penalties In January 2021, W&T entered into a Settlement Agreement with the Bureau of Safety and Environmental Enforcement (the “ The final installment was paid in February 2023 . Contingent Decommissioning Obligations The Company may be subject to retained liabilities with respect to certain divested property interests by operation of law. Certain counterparties in past divestiture transactions or third parties in existing leases that have filed for bankruptcy protection or undergone associated reorganizations may not be able to perform required abandonment obligations. Due to operation of law, W&T may be required to assume decommissioning obligations for those interests. The Company may be held jointly and severally liable for the decommissioning of various facilities and related wells. W&T no longer owns these assets nor are they related to current operations. During 2021 and 2022, as a result of the declaration of bankruptcy by a third party that is the indirect successor in title to certain offshore interests that were previously divested by the Company, W&T recorded a total contingent loss accrual of $20.4 million related to anticipated decommissioning obligations, which was reflected in Other (income) expense, net on the Condensed Consolidated Statements of Operations in the period recorded. Although it is reasonably possible that the Company could receive additional state or federal decommissioning orders in the future or be notified of defaulting third parties in existing leases, the Company cannot predict with certainty, if, how or when such orders or notices will be resolved or estimate a possible loss or range of loss that may result from such orders. However, the Company could incur judgments, enter into settlements or revise the Company’s opinion regarding the outcome of certain notices or matters, and such developments could have a material adverse effect on the Company’s results of operations in the period in which the amounts are accrued and the Company’s cash flows in the period in which the amounts are paid. To the extent that the Company does incur costs associated with these properties in future periods, W&T intends to seek contribution from other parties that owned an interest in the facilities. Other Claims In the ordinary course of business, the Company is a party to various pending or threatened claims and complaints seeking damages or other remedies concerning commercial operations and other matters. In addition, claims or contingencies may arise related to matters occurring prior to the Company’s acquisition of properties or related to matters occurring subsequent to the Company’s sale of properties. In certain cases, W&T has indemnified the sellers of properties acquired, and in other cases, W&T has indemnified the buyers of properties sold. The Company is also subject to federal and state administrative proceedings conducted in the ordinary course of business including matters related to alleged royalty underpayments on certain federal-owned properties. Although W&T can give no assurance about the outcome of pending legal and federal or state administrative proceedings and the effect such an outcome may have, the Company believes that any ultimate liability resulting from the outcome of such proceedings, to the extent not otherwise provided for or covered by insurance, will not have a material adverse effect on the consolidated financial position, results of operations or liquidity of the Company. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 9 Months Ended |
Sep. 30, 2023 | |
Notes to Financial Statements | |
RELATED PARTY TRANSACTIONS | NOTE 13 — RELATED PARTY TRANSACTIONS On May 15, 2023, the Company acquired a corporate aircraft from a company affiliated with and controlled by the Company’s CEO. The purchase price of the aircraft was $19.1 million, which was paid using $9.0 million of cash on hand and through the assumption of the TVPX Loan (see Note 2 – Debt The aircraft was purchased as part of a series of transactions pursuant to which the Company restructured the compensation for its Named Executive Officers. Prior to the Company’s purchase of the aircraft, the Company used the aircraft for business purposes, and the CEO also used the aircraft for personal purposes. Both the Company’s use for business purposes and the CEO’s unlimited use for personal purposes were paid for by the Company pursuant to the CEO’s prior employment agreement. In connection with the Company’s efforts to significantly reduce overall executive compensation, including perquisite compensation the CEO was receiving for personal use of the aircraft, on April 20, 2023, the Company entered into an amendment to the employment agreement with the CEO which requires that the Company be reimbursed for personal use of the aircraft in accordance with the Company’s aircraft use policy. |
SUBSEQUENT EVENT
SUBSEQUENT EVENT | 9 Months Ended |
Sep. 30, 2023 | |
SUBSEQUENT EVENT | |
SUBSEQUENT EVENT | NOTE 14 — SUBSEQUENT EVENT On September 26, 2023, the Company entered into a purchase and sale agreement to acquire rights, titles and interests in and to certain leases, wells and personal property in the central shelf region of the Gulf of Mexico, among other assets, for a gross purchase price of $88.5 million, subject to customary purchase price adjustments. On October 20, 2023, the Company terminated the purchase and sale agreement pursuant to and in accordance with section 14.1(f) thereof, which provided that either the Company or the seller could terminate the agreement at any time following 5:00 p.m. Central Time on October 20, 2023. In conjunction with the termination of the purchase and sale agreement, the $8.9 million deposit was returned to the Company. |
BASIS OF PRESENTATION AND SIG_2
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed consolidated financial statements include the accounts of the Company, its wholly-owned subsidiaries and an interest in Monza Energy LLC (“Monza”), which is accounted for under the proportional consolidation method. All intercompany accounts and transactions have been eliminated in consolidation. These condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Accordingly, certain information and disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been condensed or omitted. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for interim periods are not necessarily indicative of the results that may be expected for the entire year. These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes included in Item 8 “Financial Statements and Supplementary Data” of the Company’s Annual Report on Form 10-K for the year ended December 31, 2022 (the “2022 Annual Report”). |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, the reported amounts of revenues and expenses during the reporting periods and the reported amounts of proved oil and natural gas reserves. Actual results could differ from those estimates. |
Allowance for Credit Losses | Allowance for Credit Losses The Company has receivables related to joint interest arrangements primarily with mid-size oil and natural gas companies with a substantial majority of the net receivable balance concentrated in less than ten companies. A loss methodology is used to develop the allowance for credit losses on material receivables to estimate the net amount to be collected. The loss methodology uses historical data, current market conditions and forecasts of future economic conditions. The Company’s maximum exposure at any time would be the receivable balance. Joint interest receivables on the Condensed Consolidated Balance Sheets are presented net of allowance for credit losses of $11.2 million and $12.1 million as of September 30, 2023 and December 31, 2022, respectively. |
Employee Retention Credit | Employee Retention Credit Under the Consolidated Appropriations Act of 2021, the Company recognized a $2.2 million employee retention credit during the nine months ended September 30, 2023, which is included as a credit to General and administrative expenses |
Prepaid Expenses and Other Current Assets | Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets consist of the following (in thousands): September 30, December 31, 2023 2022 Derivatives (1) $ 1,294 $ 4,954 Insurance/bond premiums 8,955 6,046 Deposit related to acquisition (Note 14) 8,850 — Prepaid deposits related to royalties 7,322 9,139 Prepayments to vendors 1,520 1,767 Prepayments to joint interest partners 2,242 1,717 Current portion of debt issuance costs 213 687 Other 80 33 Prepaid expenses and other current assets $ 30,476 $ 24,343 (1) Includes closed contracts which have not yet settled. |
Oil and Natural Gas Properties and Other, Net | Oil and Natural Gas Properties and Other, Net Oil and natural gas properties and other, net consist of the following (in thousands): September 30, December 31, 2023 2022 Oil and natural gas properties and equipment $ 8,908,490 $ 8,813,404 Furniture, fixtures and other 43,087 20,915 Total property and equipment 8,951,577 8,834,319 Less: Accumulated depreciation, depletion, amortization and impairment (8,180,123) (8,099,104) Oil and natural gas properties and other, net $ 771,454 $ 735,215 |
Other Assets | Other Assets Other assets consist of the following (in thousands): September 30, December 31, 2023 2022 Operating lease right-of-use assets $ 10,623 $ 10,364 Investment in White Cap, LLC 2,924 2,453 Proportional consolidation of Monza 10,805 9,321 Derivatives (1) 14,372 23,236 Other 1,662 2,175 Total other assets $ 40,386 $ 47,549 (1) Includes open contracts. |
Accrued Liabilities | Accrued Liabilities Accrued liabilities consist of the following (in thousands): September 30, December 31, 2023 2022 Accrued interest $ 5,430 $ 8,967 Accrued salaries/payroll taxes/benefits 9,065 15,097 Litigation accruals 56 396 Operating lease liabilities 871 1,628 Derivatives (1) 17,659 46,595 Other 1,183 1,358 Total accrued liabilities $ 34,264 $ 74,041 (1) Includes closed contracts which have not yet settled . |
Other Liabilities | Other Liabilities Other liabilities consist of the following (in thousands): September 30, December 31, 2023 2022 Dispute related to royalty deductions $ 5,250 $ 4,937 Derivatives 11,790 43,061 Operating lease liabilities 11,700 10,527 Other 708 609 Total other liabilities $ 29,448 $ 59,134 |
BASIS OF PRESENTATION AND SIG_3
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Notes Tables | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Table Text Block] | Prepaid expenses and other current assets consist of the following (in thousands): September 30, December 31, 2023 2022 Derivatives (1) $ 1,294 $ 4,954 Insurance/bond premiums 8,955 6,046 Deposit related to acquisition (Note 14) 8,850 — Prepaid deposits related to royalties 7,322 9,139 Prepayments to vendors 1,520 1,767 Prepayments to joint interest partners 2,242 1,717 Current portion of debt issuance costs 213 687 Other 80 33 Prepaid expenses and other current assets $ 30,476 $ 24,343 (1) Includes closed contracts which have not yet settled. |
Property, Plant and Equipment [Table Text Block] | Oil and natural gas properties and other, net consist of the following (in thousands): September 30, December 31, 2023 2022 Oil and natural gas properties and equipment $ 8,908,490 $ 8,813,404 Furniture, fixtures and other 43,087 20,915 Total property and equipment 8,951,577 8,834,319 Less: Accumulated depreciation, depletion, amortization and impairment (8,180,123) (8,099,104) Oil and natural gas properties and other, net $ 771,454 $ 735,215 |
Schedule of Other Assets, Noncurrent [Table Text Block] | Other assets consist of the following (in thousands): September 30, December 31, 2023 2022 Operating lease right-of-use assets $ 10,623 $ 10,364 Investment in White Cap, LLC 2,924 2,453 Proportional consolidation of Monza 10,805 9,321 Derivatives (1) 14,372 23,236 Other 1,662 2,175 Total other assets $ 40,386 $ 47,549 (1) Includes open contracts. |
Schedule of Accrued Liabilities [Table Text Block] | Accrued liabilities consist of the following (in thousands): September 30, December 31, 2023 2022 Accrued interest $ 5,430 $ 8,967 Accrued salaries/payroll taxes/benefits 9,065 15,097 Litigation accruals 56 396 Operating lease liabilities 871 1,628 Derivatives (1) 17,659 46,595 Other 1,183 1,358 Total accrued liabilities $ 34,264 $ 74,041 (1) Includes closed contracts which have not yet settled . |
Other Noncurrent Liabilities [Table Text Block] | Other liabilities consist of the following (in thousands): September 30, December 31, 2023 2022 Dispute related to royalty deductions $ 5,250 $ 4,937 Derivatives 11,790 43,061 Operating lease liabilities 11,700 10,527 Other 708 609 Total other liabilities $ 29,448 $ 59,134 |
DEBT (Tables)
DEBT (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Notes Tables | |
Schedule of Debt Instruments [Table Text Block] | The components comprising the Company’s debt are presented in the following table (in thousands): September 30, December 31, 2023 2022 TVPX Loan: Principal $ 11,300 $ — Unamortized discount (1,434) — Unamortized debt issuance costs (246) — Total 9,620 — Term Loan: Principal 121,571 147,899 Unamortized debt issuance costs (3,337) (4,592) Total 118,234 143,307 Credit Agreement — — 11.75% Senior Second Lien Notes due 2026: Principal 275,000 — Unamortized debt issuance costs (5,695) — Total 269,305 — 9.75% Senior Second Lien Notes due 2023: Principal — 552,460 Unamortized debt issuance costs — (2,330) Total — 550,130 Total debt, net 397,159 693,437 Less current portion, net (30,015) (582,249) Long-term debt, net $ 367,144 $ 111,188 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Notes Tables | |
Schedule of Derivative Assets at Fair Value [Table Text Block] | September 30, December 31, 2023 2022 Assets: Derivative instruments - current $ 1,294 $ 4,954 Derivative instruments - long-term 14,372 23,236 Liabilities: Derivative instruments - current 17,659 46,595 Derivative instruments - long-term 11,790 43,061 |
Schedule of Carrying Values and Estimated Fair Values of Debt Instruments [Table Text Block] | The following table presents the net value and fair value of the Company’s debt (in thousands): September 30, 2023 December 31, 2022 Net Value Fair Value Net Value Fair Value TVPX Loan $ 9,620 $ 9,783 $ — $ — Term Loan 118,234 113,478 143,307 139,056 11.75% Notes 269,305 283,580 — — 9.75% Notes — — 550,130 544,902 Total $ 397,159 $ 406,841 $ 693,437 $ 683,958 |
DERIVATIVE FINANCIAL INSTRUME_2
DERIVATIVE FINANCIAL INSTRUMENTS (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Notes Tables | |
Schedule of Notional Amounts of Outstanding Derivative Positions [Table Text Block] | The following table reflects the contracted volumes and weighted average prices under the terms of the Company’s open derivative contracts as of September 30, 2023: Average Instrument Daily Total Weighted Weighted Weighted Period Type Volumes Volumes Strike Price Put Price Call Price Natural Gas - Henry Hub (NYMEX) (MMbtu) (1) (MMbtu) (1) ($/MMbtu) (1) ($/MMbtu) (1) ($/MMbtu) (1) Oct 2023 - Dec 2023 calls 70,000 6,440,000 $ — $ — $ 7.50 Jan 2024 - Dec 2024 calls 65,000 23,790,000 $ — $ — $ 6.13 Jan 2025 - Mar 2025 calls 62,000 5,580,000 $ — $ — $ 5.50 Oct 2023 - Dec 2023 (2) swaps 71,739 6,600,000 $ 2.50 $ — $ — Jan 2024 - Dec 2024 (2) swaps 65,573 24,000,000 $ 2.46 $ — $ — Jan 2025 - Mar 2025 (2) swaps 63,333 5,700,000 $ 2.72 $ — $ — Apr 2025 - Dec 2025 (2) puts 62,183 17,100,000 $ — $ 2.27 $ — Jan 2026 - Dec 2026 (2) puts 55,895 20,400,000 $ — $ 2.35 $ — Jan 2027 - Dec 2027 (2) puts 52,607 19,200,000 $ — $ 2.37 $ — Jan 2028 - Apr 2028 (2) puts 49,725 6,000,000 $ — $ 2.42 $ — (1) MMbtu – Million British Thermal Units (2) These contracts were entered into by Aquasition LLC in conjunction with the Term Loan (see Note 6 – Subsidiary Borrowers ) . |
Schedule of Derivatives Instruments Statements of Financial Performance and Financial Position, Location [Table Text Block] | The fair value of the Company’s derivative financial instruments was recorded in the Condensed Consolidated Balance Sheets as follows (in thousands): September 30, December 31, 2023 2022 Prepaid expenses and other current assets $ 1,294 $ 4,954 Other assets 14,372 23,236 Accrued liabilities 17,659 46,595 Other liabilities 11,790 43,061 The impact of commodity derivative contracts on the Condensed Consolidated Statements of Operations were as follows (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Realized loss (1) $ 1,971 $ 132,289 $ 2,501 $ 96,315 Unrealized (gain) loss (3,462) (93,540) (44,061) 13,577 Derivative (gain) loss, net $ (1,491) $ 38,749 $ (41,560) $ 109,892 (1) The nine months ended September 30, 2022 includes the effect of the $138.0 million realized gain related to the monetization of certain natural gas call contracts through restructuring of strike prices. |
Schedule of Cash Receipts and Payments on Commodity Derivative Contract Settlements [Table Text Block] | Cash payments on commodity derivative contract settlements, net, are included within Net cash provided by operating activities Nine Months Ended September 30, 2023 2022 Derivative (gain) loss $ (41,560) $ 109,892 Derivative cash payments, net (1) (6,123) (1,022) Derivative cash premium payments, net — (46,111) (1) The nine months ended September 30, 2022 includes $105.3 million of net cash receipts related to the monetization of certain natural gas call contracts through restructuring of strike prices. |
ACQUISITION (Tables)
ACQUISITION (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
ACQUISITION | |
Schedule of the preliminary allocation of total purchase consideration | The following table represents the Company’s preliminary allocation of total purchase consideration to the identifiable assets acquired and liabilities assumed based on the fair values on the date of acquisition (in thousands): Oil and natural gas properties and other, net $ 45,215 Asset retirement obligations (16,352) Allocated purchase price $ 28,863 |
SUBSIDIARY BORROWERS (Tables)
SUBSIDIARY BORROWERS (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
SUBSIDIARY BORROWERS | |
Schedule of Consolidation of Subsidiary Borrowers [Table Text Block] | The following table presents the amounts recorded by the Company on the Condensed Consolidated Balance Sheets related to the consolidation of the Subsidiary Borrowers and the Subsidiary Parent (in thousands): September 30, December 31, 2023 2022 Assets: Cash and cash equivalents $ 1,408 $ 21,764 Receivables: Oil and natural gas sales 22,988 37,344 Joint interest, net (25,446) (5,760) Prepaid expenses and other assets (55) 417 Oil and natural gas properties and other, net 290,686 280,649 Other assets 9,328 8,473 Liabilities: Accounts payable 10,432 27,387 Undistributed oil and natural gas proceeds 4,480 7,930 Accrued liabilities 17,982 45,102 Current portion of long-term debt, net 29,451 32,119 Long-term debt, net 88,783 111,188 Asset retirement obligations 67,402 61,138 Other liabilities 16,531 47,398 |
Schedule of Subsidiary Borrowers and the subsidiary that owns the equity [Table Text Block] | The following table presents the amounts recorded by the Company in the Condensed Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Total revenues $ 28,865 $ 94,264 $ 75,425 $ 218,625 Total operating expenses 18,807 19,776 69,297 52,961 Interest expense, net 2,536 3,405 7,947 11,841 Derivative (gain) loss (2,652) 55,850 (55,041) 187,896 |
JOINT VENTURE DRILLING PROGRAM
JOINT VENTURE DRILLING PROGRAM (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Note 6 - Joint Venture Drilling Program | |
Schedule of Condensed Consolidated Balance Sheet related to the consolidation of the proportional interest in Monza's operations | The following table presents the amounts recorded by W&T on the Condensed Consolidated Balance Sheets related to the consolidation of the proportional interest in Monza’s operations (in thousands): September 30, December 31, 2023 2022 Working capital $ 1,471 $ 2,515 Oil and natural gas properties and other, net 33,104 37,260 Asset retirement obligations 572 467 Other assets 10,805 11,571 |
Schedule of Condensed Consolidated Statement of Operations related to the consolidation of the proportional interest in Monza's operations | The following table presents the amounts recorded by W&T in the Condensed (i Nine Months Ended September 30, 2023 2022 Total revenues $ 9,635 $ 23,681 Total operating expenses 7,046 10,805 Interest income 147 — |
ASSET RETIREMENT OBLIGATIONS (T
ASSET RETIREMENT OBLIGATIONS (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Notes Tables | |
Schedule of Change in Asset Retirement Obligation [Table Text Block] | Nine Months Ended September 30, 2023 2022 Asset retirement obligations, beginning of period $ 466,429 $ 424,495 Liabilities settled (24,918) (61,285) Accretion expense 21,641 19,536 Liabilities acquired 16,352 33,202 Liabilities incurred 113 138 Revisions of estimated liabilities 18,797 37,524 Asset retirement obligations, end of period 498,414 453,610 Less: Current portion (33,169) (54,886) Long-term $ 465,245 $ 398,724 |
SHARE-BASED AWARDS AND CASH-B_2
SHARE-BASED AWARDS AND CASH-BASED INCENTIVE COMPENSATION (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Notes Tables | |
Schedule of Unvested Restricted Stock Units Roll Forward [Table Text Block] | A summary of activity related to RSUs during the nine months ended September 30, 2023 is as follows: Weighted Average Grant Date Restricted Fair Value Stock Units per Unit Nonvested, beginning of period 1,221,461 $ 5.76 Granted 1,785,960 4.06 Vested (486,134) 5.62 Forfeited (111,717) 5.72 Nonvested, end of period 2,409,570 4.53 |
Schedule of Nonvested Performance-based Units Activity [Table Text Block] | A summary of activity related to PSUs during the nine months ended September 30, 2023 is as follows: Weighted Average Grant Date Performance Fair Value Share Units per Unit Nonvested, beginning of period 1,502,239 $ 9.78 Granted 1,289,720 4.85 Vested (9,308) 8.13 Forfeited (231,175) 9.69 Nonvested, end of period 2,551,476 7.30 |
Share-based Payment Arrangement, Nonemployee Director Award Plan, Activity [Table Text Block] | A summary of activity related to restricted shares during the nine months ended September 30, 2023 is as follows: Weighted Average Grant Date Restricted Fair Value Shares per Share Nonvested, beginning of period 42,426 $ 4.95 Granted — — Vested (42,426) 4.95 Nonvested, end of period — — |
Share-based Payment Arrangement, Cost by Plan [Table Text Block] | The following table presents the compensation costs General and administrative expenses in the Condensed Consolidated Statements of Operations (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Restricted stock units $ 1,506 $ 1,240 $ 2,949 $ 2,852 Performance share units 1,744 1,352 4,240 2,154 Restricted shares — 53 70 173 Total $ 3,250 $ 2,645 $ 7,259 $ 5,179 |
Performance Share Units [Member] | |
Notes Tables | |
Schedule of Share-based Payment Award, Equity Instrument Other Than Options, Valuation Assumptions [Table Text Block] | Expected term for performance period (in years) 2.6 Expected volatility 76.1 % Risk-free interest rate 4.2 % |
Long-term Cash-Based Incentive Compensation [Member] | |
Notes Tables | |
Schedule of Incentive Compensation Expense [Table Text Block] | The following table presents the cash-based incentive compensation costs in the Condensed Consolidated Statements of Operations (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Lease operating expenses $ 1,142 $ 1,532 $ 2,710 $ 1,994 General and administrative expenses 2,609 3,559 9,478 6,164 Total $ 3,751 $ 5,091 $ 12,188 $ 8,158 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Notes Tables | |
Schedule of Earnings Per Share, Basic and Diluted [Table Text Block] | The following table presents the calculation of basic and diluted (loss) earnings per common share (in thousands, except per share amounts): Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Net income $ 2,145 $ 66,721 $ 16,041 $ 187,700 Weighted average common shares outstanding - basic 146,483 143,116 146,451 143,026 Dilutive effect of securities 4,976 2,766 3,405 1,670 Weighted average common shares outstanding - diluted 151,459 145,882 149,856 144,696 Earnings per common share: Basic $ 0.01 $ 0.46 $ 0.11 $ 1.30 Diluted 0.01 0.46 0.11 1.30 |
BASIS OF PRESENTATION AND SIG_4
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Details) $ in Millions | 9 Months Ended | |
Sep. 30, 2023 USD ($) company segment | Dec. 31, 2022 USD ($) | |
Number of reportable segment | segment | 1 | |
Maximum number of companies | company | 10 | |
Oil and Gas Joint Interest Billing Receivables, Allowance for Credit Loss, Current | $ 11.2 | $ 12.1 |
General and Administrative Expense [Member] | ||
Employee Retention Credit | $ 2.2 |
BASIS OF PRESENTATION AND SIG_5
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES - Schedule of Amounts Recorded in Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 | |
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES - Schedule of Amounts Recorded in Prepaid Expenses and Other Current Assets (Details) | |||
Derivatives | [1] | $ 1,294 | $ 4,954 |
Insurance/bond premiums | 8,955 | 6,046 | |
Deposit related to acquisition (Note 14) | 8,850 | ||
Prepaid deposits related to royalties | 7,322 | 9,139 | |
Prepayments to vendors | 1,520 | 1,767 | |
Prepayments to joint interest partners | 2,242 | 1,717 | |
Current portion of debt issuance costs | 213 | 687 | |
Other | 80 | 33 | |
Prepaid expenses and other current assets | $ 30,476 | $ 24,343 | |
[1] Includes closed contracts which have not yet settled. |
BASIS OF PRESENTATION AND SIG_6
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES - Schedule of Oil and Natural Gas Properties and Other, Net at Cost (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES - Schedule of Oil and Natural Gas Properties and Other, Net at Cost (Details) | ||
Oil and natural gas properties and equipment | $ 8,908,490 | $ 8,813,404 |
Furniture, fixtures and other | 43,087 | 20,915 |
Total property and equipment | 8,951,577 | 8,834,319 |
Less: Accumulated depreciation, depletion, amortization and impairment | (8,180,123) | (8,099,104) |
Oil and natural gas properties and other, net | $ 771,454 | $ 735,215 |
BASIS OF PRESENTATION AND SIG_7
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES - Schedule of Other Assets (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 | |
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES - Schedule of Other Assets (Details) | |||
Operating lease right-of-use assets | $ 10,623 | $ 10,364 | |
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration] | Total other assets | Total other assets | |
Investment in White Cap, LLC | $ 2,924 | $ 2,453 | |
Proportional consolidation of Monza | 10,805 | 9,321 | |
Derivatives | [1] | 14,372 | 23,236 |
Other | 1,662 | 2,175 | |
Total other assets | $ 40,386 | $ 47,549 | |
[1] Includes open contracts. |
BASIS OF PRESENTATION AND SIG_8
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES - Schedule of Accrued Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 | |
Note 1 - Significant Accounting Policies - Schedule of Accrued Liabilities (Details) | |||
Accrued interest | $ 5,430 | $ 8,967 | |
Accrued salaries/payroll taxes/benefits | 9,065 | 15,097 | |
Litigation accruals | 56 | 396 | |
Operating lease liabilities | $ 871 | $ 1,628 | |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration] | Total accrued liabilities | Total accrued liabilities | |
Derivatives | [1] | $ 17,659 | $ 46,595 |
Other | 1,183 | 1,358 | |
Total accrued liabilities | $ 34,264 | $ 74,041 | |
[1] Includes closed contracts which have not yet settled. |
BASIS OF PRESENTATION AND SIG_9
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES - Schedule of Other Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Note 1 - Significant Accounting Policies - Schedule of Other Liabilities (Details) | ||
Dispute related to royalty deductions | $ 5,250 | $ 4,937 |
Derivatives | 11,790 | 43,061 |
Operating lease liabilities | $ 11,700 | $ 10,527 |
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible Enumeration] | Total other liabilities | Total other liabilities |
Other | $ 708 | $ 609 |
Total other liabilities | $ 29,448 | $ 59,134 |
DEBT - Components of Long-term
DEBT - Components of Long-term Debt (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Feb. 08, 2023 | Jan. 27, 2023 | Dec. 31, 2022 | Sep. 30, 2022 | May 19, 2021 |
Total | $ 397,159 | $ 693,437 | ||||
Less current portion, net | (30,015) | (582,249) | ||||
Long-term debt, net | 367,144 | 111,188 | ||||
TVPX Loan [Member] | ||||||
Principal | 11,300 | |||||
Unamortized discount | (1,434) | |||||
Unamortized debt issuance costs | (246) | |||||
Total | 9,620 | |||||
Term Loan [Member] | ||||||
Principal | 121,571 | 147,899 | ||||
Unamortized debt issuance costs | (3,337) | (4,592) | ||||
Total | 118,234 | $ 143,307 | ||||
Debt instrument, interest rate, stated percentage | 7% | |||||
11.75% Senior Second Lien Notes due 2026 [Member] | ||||||
Principal | 275,000 | |||||
Unamortized debt issuance costs | (5,695) | |||||
Total | $ 269,305 | |||||
Debt instrument, interest rate, stated percentage | 11.75% | 11.75% | 11.75% | 11.75% | 11.75% | |
9.75% Senior Second Lien Notes due November 2023 [Member] | ||||||
Principal | $ 552,500 | $ 552,460 | ||||
Unamortized debt issuance costs | (2,330) | |||||
Total | $ 550,130 | |||||
Debt instrument, interest rate, stated percentage | 9.75% | 9.75% | 9.75% | 9.75% |
DEBT (Details)
DEBT (Details) $ in Thousands | 9 Months Ended | |||||||
May 15, 2023 USD ($) | Feb. 08, 2023 USD ($) | Jan. 27, 2023 USD ($) | Sep. 30, 2023 USD ($) item | Oct. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) | Sep. 30, 2022 | May 19, 2021 USD ($) | |
Current portion of long-term debt, net (Note 2) | $ 30,015 | $ 582,249 | ||||||
Fair market value | 406,841 | 683,958 | ||||||
Redemption Prior to August 1, 2024 With Applicable Premium [Member] | ||||||||
Debt Instrument, Redemption Price, Percentage | 100% | |||||||
Redemption Prior to August 1, 2024 [Member] | ||||||||
Debt Instrument, Redemption Price, Percentage | 111.75% | |||||||
Redemption On or After August 1, 2024 [Member] | ||||||||
Debt Instrument, Redemption Price, Percentage | 105.875% | |||||||
Redemption On or After August 1, 2025 [Member] | ||||||||
Debt Instrument, Redemption Price, Percentage | 100% | |||||||
Maximum [Member] | Redemption Prior to August 1, 2024 [Member] | ||||||||
Debt Instrument, Redemption Price, Percentage of Principal Amount Redeemed | 35% | |||||||
TVPX Loan and Term Loan [Member] | ||||||||
Current portion of long-term debt, net (Note 2) | 30,000 | |||||||
TVPX Loan [Member] | ||||||||
Principal | 11,300 | |||||||
Fair market value | 9,783 | |||||||
TVPX Loan [Member] | Related Party [Member] | ||||||||
Purchase price of aircraft | $ 19,100 | |||||||
Purchase price paid using cash on hand | $ 9,000 | |||||||
Debt instrument, interest rate, stated percentage | 2.49% | |||||||
Principal amount | $ 11,800 | |||||||
Term of debt | 41 months | |||||||
Monthly amortization payments | $ 91,700 | |||||||
Balloon payment | 8,000 | |||||||
Fair market value | $ 10,100 | |||||||
Term Loan [Member] | ||||||||
Principal | 121,571 | 147,899 | ||||||
Debt instrument, interest rate, stated percentage | 7% | |||||||
Principal amount | $ 215,000 | |||||||
Fair market value | 113,478 | 139,056 | ||||||
Credit Agreement [Member] | ||||||||
Borrowings outstanding | 0 | |||||||
Letters of Credit Outstanding, Amount | 4,400 | $ 4,400 | ||||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 50,000 | |||||||
Number of trailing quarters | item | 4 | |||||||
Total proved PV -10 to debt ratio | 2 | |||||||
Percentage of funding or utilization of the credit facility | 100% | |||||||
Credit Agreement Leverage Ratio | 2.50 | |||||||
Credit Agreement Minimum Current Ratio | 1% | |||||||
Credit Agreement [Member] | Subsequent Event | ||||||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 50,000 | |||||||
Credit Agreement [Member] | Secured Overnight Financing Rate (SOFR) [Member] | ||||||||
Debt Instrument, Basis Spread on Variable Rate | 6% | |||||||
Short Term First Priority Lien Secured Revolving Facility [Member] | ||||||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 100,000 | |||||||
11.75% Senior Second Lien Notes due 2026 [Member] | ||||||||
Principal | $ 275,000 | |||||||
Debt instrument, interest rate, stated percentage | 11.75% | 11.75% | 11.75% | 11.75% | 11.75% | |||
Principal amount | $ 275,000 | |||||||
Fair market value | $ 283,580 | |||||||
Debt Instrument, Interest Rate, Effective Percentage | 12.70% | |||||||
Repayments of Debt | $ 296,100 | |||||||
9.75% Senior Second Lien Notes due November 2023 [Member] | ||||||||
Principal | $ 552,500 | $ 552,460 | ||||||
Debt instrument, interest rate, stated percentage | 9.75% | 9.75% | 9.75% | 9.75% | ||||
Fair market value | $ 544,902 | |||||||
Debt Instrument, Redemption Price, Percentage of Principal Amount Redeemed | 100% | |||||||
Proceeds from Issuance of Debt | $ 270,800 |
FAIR VALUE MEASUREMENTS - Fair
FAIR VALUE MEASUREMENTS - Fair Value of Derivative Financial Instruments (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 | |
Derivative instruments - current | [1] | $ 1,294 | $ 4,954 |
Derivative instruments - long-term | [2] | 14,372 | 23,236 |
Derivative instruments - current | [1] | 17,659 | 46,595 |
Derivative instruments - long-term | 11,790 | 43,061 | |
Open Contracts [Member] | |||
Derivative instruments - current | 1,294 | 4,954 | |
Derivative instruments - long-term | 14,372 | 23,236 | |
Derivative instruments - current | 17,659 | 46,595 | |
Derivative instruments - long-term | $ 11,790 | $ 43,061 | |
[1] Includes closed contracts which have not yet settled. Includes open contracts. |
FAIR VALUE MEASUREMENTS - Net V
FAIR VALUE MEASUREMENTS - Net Value and Fair Value of Debt (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Feb. 08, 2023 | Jan. 27, 2023 | Dec. 31, 2022 | Sep. 30, 2022 | May 19, 2021 |
Long-term debt, net value | $ 397,159 | $ 693,437 | ||||
Long-term debt, fair value | 406,841 | 683,958 | ||||
TVPX Loan [Member] | ||||||
Long-term debt, net value | 9,620 | |||||
Long-term debt, fair value | 9,783 | |||||
Term Loan [Member] | ||||||
Long-term debt, net value | 118,234 | 143,307 | ||||
Long-term debt, fair value | 113,478 | $ 139,056 | ||||
Debt instrument, interest rate, stated percentage | 7% | |||||
11.75% Senior Second Lien Notes due 2026 [Member] | ||||||
Long-term debt, net value | 269,305 | |||||
Long-term debt, fair value | $ 283,580 | |||||
Debt instrument, interest rate, stated percentage | 11.75% | 11.75% | 11.75% | 11.75% | 11.75% | |
9.75% Senior Second Lien Notes due November 2023 [Member] | ||||||
Long-term debt, net value | $ 550,130 | |||||
Long-term debt, fair value | $ 544,902 | |||||
Debt instrument, interest rate, stated percentage | 9.75% | 9.75% | 9.75% | 9.75% |
DERIVATIVE FINANCIAL INSTRUME_3
DERIVATIVE FINANCIAL INSTRUMENTS - Summary of Open Commodity Derivative Contracts (Details) | 9 Months Ended |
Sep. 30, 2023 MMBTU $ / MMBTU | |
NYMEX Natural Gas Henry Hub Call | Oct 2023 - Dec 2023 | |
Average daily volume | 70,000 |
Total Volumes | 6,440,000 |
NYMEX Natural Gas Henry Hub Call | Oct 2023 - Dec 2023 | Call Option | |
Weighted Price (in dollars per share) | $ / MMBTU | 7.50 |
NYMEX Natural Gas Henry Hub Call | Jan 2024 - Dec 2024 | |
Average daily volume | 65,000 |
Total Volumes | 23,790,000 |
NYMEX Natural Gas Henry Hub Call | Jan 2024 - Dec 2024 | Call Option | |
Weighted Price (in dollars per share) | $ / MMBTU | 6.13 |
NYMEX Natural Gas Henry Hub Call | Jan 2025 - Mar 2025 | |
Average daily volume | 62,000 |
Total Volumes | 5,580,000 |
NYMEX Natural Gas Henry Hub Call | Jan 2025 - Mar 2025 | Call Option | |
Weighted Price (in dollars per share) | $ / MMBTU | 5.50 |
NYMEX Natural Gas Henry Hub Swap | Oct 2023 - Dec 2023 | |
Average daily volume | 71,739 |
Total Volumes | 6,600,000 |
Weighted Price (in dollars per share) | $ / MMBTU | 2.50 |
NYMEX Natural Gas Henry Hub Swap | Jan 2024 - Dec 2024 | |
Average daily volume | 65,573 |
Total Volumes | 24,000,000 |
Weighted Price (in dollars per share) | $ / MMBTU | 2.46 |
NYMEX Natural Gas Henry Hub Swap | Jan 2025 - Mar 2025 | |
Average daily volume | 63,333 |
Total Volumes | 5,700,000 |
Weighted Price (in dollars per share) | $ / MMBTU | 2.72 |
NYMEX Natural Gas Henry Hub Put | Apr 2025 - Dec 2025 | |
Average daily volume | 62,183 |
Total Volumes | 17,100,000 |
NYMEX Natural Gas Henry Hub Put | Apr 2025 - Dec 2025 | Put Option | |
Weighted Price (in dollars per share) | $ / MMBTU | 2.27 |
NYMEX Natural Gas Henry Hub Put | Jan 2026 - Dec 2026 | |
Average daily volume | 55,895 |
Total Volumes | 20,400,000 |
NYMEX Natural Gas Henry Hub Put | Jan 2026 - Dec 2026 | Put Option | |
Weighted Price (in dollars per share) | $ / MMBTU | 2.35 |
NYMEX Natural Gas Henry Hub Put | Jan 2027 - Dec 2027 | |
Average daily volume | 52,607 |
Total Volumes | 19,200,000 |
NYMEX Natural Gas Henry Hub Put | Jan 2027 - Dec 2027 | Put Option | |
Weighted Price (in dollars per share) | $ / MMBTU | 2.37 |
NYMEX Natural Gas Henry Hub Put | Jan 2028 - Apr 2028 | |
Average daily volume | 49,725 |
Total Volumes | 6,000,000 |
NYMEX Natural Gas Henry Hub Put | Jan 2028 - Apr 2028 | Put Option | |
Weighted Price (in dollars per share) | $ / MMBTU | 2.42 |
DERIVATIVE FINANCIAL INSTRUME_4
DERIVATIVE FINANCIAL INSTRUMENTS - Financial Statement Presentation - Balance Sheets (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 | |
Derivatives asset, current | [1] | $ 1,294 | $ 4,954 |
Derivative Asset, Current, Statement of Financial Position [Extensible Enumeration] | Prepaid expenses and other assets (Note 1) | Prepaid expenses and other assets (Note 1) | |
Derivative assets, non-current | [2] | $ 14,372 | $ 23,236 |
Derivative Asset, Noncurrent, Statement of Financial Position [Extensible Enumeration] | Other assets (Note 1) | Other assets (Note 1) | |
Derivative liabilities, current | [1] | $ 17,659 | $ 46,595 |
Derivative Liability, Current, Statement of Financial Position [Extensible Enumeration] | Accrued Liabilities, Current | Accrued Liabilities, Current | |
Derivative liabilities, non-current | $ 11,790 | $ 43,061 | |
Derivative Liability, Noncurrent, Statement of Financial Position [Extensible Enumeration] | Other liabilities (Note 1) | Other liabilities (Note 1) | |
Open Contracts and Closed Contracts Which Had Not Yet Been Settled [Member] | |||
Derivatives asset, current | $ 1,294 | $ 4,954 | |
Derivative assets, non-current | 14,372 | 23,236 | |
Derivative liabilities, current | 17,659 | 46,595 | |
Derivative liabilities, non-current | $ 11,790 | $ 43,061 | |
[1] Includes closed contracts which have not yet settled. Includes open contracts. |
DERIVATIVE FINANCIAL INSTRUME_5
DERIVATIVE FINANCIAL INSTRUMENTS - Financial Statement Presentation - Statements of Operations (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Derivative Financial Instruments. | ||||
Realized loss | $ 1,971 | $ 132,289 | $ 2,501 | $ 96,315 |
Unrealized (gain) loss | (3,462) | (93,540) | (44,061) | 13,577 |
Derivative (gain) loss, net | $ (1,491) | $ 38,749 | $ (41,560) | 109,892 |
Realized gain through restructuring of strike prices | $ 138,000 |
DERIVATIVE FINANCIAL INSTRUME_6
DERIVATIVE FINANCIAL INSTRUMENTS - Financial Statement Presentation - Statements of Cash Flows (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Derivative Financial Instruments. | ||||
Derivative (gain) loss | $ (1,491) | $ 38,749 | $ (41,560) | $ 109,892 |
Derivative cash payments, net | $ (6,123) | (1,022) | ||
Derivative cash premium payments | (46,111) | |||
Cash receipts related to natural gas call contracts through restructuring of strike prices | $ 105,300 |
ACQUISITION (Details)
ACQUISITION (Details) $ in Thousands | Sep. 20, 2023 USD ($) item | Sep. 30, 2023 USD ($) | Dec. 31, 2022 USD ($) | Sep. 30, 2022 USD ($) | Dec. 31, 2021 USD ($) |
Asset Acquisition [Line Items] | |||||
Oil and natural gas properties and other, net | $ 771,454 | $ 735,215 | |||
Asset retirement obligations | $ (498,414) | $ (466,429) | $ (453,610) | $ (424,495) | |
Interests in certain oil and natural gas producing properties | |||||
Asset Acquisition [Line Items] | |||||
Number of shallow water oil and natural gas producing assets | item | 8 | ||||
Total consideration | $ 32,000 | ||||
Cash consideration | 28,900 | ||||
Oil and natural gas properties and other, net | 45,215 | ||||
Asset retirement obligations | (16,352) | ||||
Allocated purchase price | $ 28,863 |
SUBSIDIARY BORROWERS (Details)
SUBSIDIARY BORROWERS (Details) - Term Loan [Member] - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2023 | Dec. 31, 2022 | May 19, 2021 | |
Subsidiary or Equity Method Investee [Line Items] | |||
Principal | $ 215 | ||
Subsidiary Borrowers | |||
Subsidiary or Equity Method Investee [Line Items] | |||
Cash Distributions Received | $ 0 | $ 30.2 |
SUBSIDIARY BORROWERS - Consolid
SUBSIDIARY BORROWERS - Consolidation of Subsidiary Borrowers - Balance Sheets (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 | Sep. 30, 2022 |
Assets: | |||
Cash and cash equivalents | $ 148,993 | $ 461,357 | |
Accounts receivable: | |||
Oil and natural gas sales | 48,522 | 66,146 | |
Joint interest, net | 16,049 | 14,000 | |
Prepaid expenses and other current assets (Note 1) | 30,476 | 24,343 | |
Oil and natural gas properties and other, net | 771,454 | 735,215 | |
Other assets | 40,386 | 47,549 | |
Liabilities: | |||
Accounts payable | 80,412 | 65,158 | |
Undistributed oil and natural gas proceeds | 34,649 | 41,934 | |
Accrued liabilities | 34,264 | 74,041 | |
Current portion of long-term debt, net (Note 2) | 30,015 | 582,249 | |
Long-term debt, net | 367,144 | 111,188 | |
Current portion of asset retirement obligation (Note 8) | 33,169 | 25,359 | $ 54,886 |
Other liabilities (Note 1) | 29,448 | 59,134 | |
Subsidiary Borrowers | |||
Assets: | |||
Cash and cash equivalents | 1,408 | 21,764 | |
Accounts receivable: | |||
Oil and natural gas sales | 22,988 | 37,344 | |
Joint interest, net | 25,446 | 5,760 | |
Prepaid expenses and other current assets (Note 1) | (55) | 417 | |
Oil and natural gas properties and other, net | 290,686 | 280,649 | |
Other assets | 9,328 | 8,473 | |
Liabilities: | |||
Accounts payable | 10,432 | 27,387 | |
Undistributed oil and natural gas proceeds | 4,480 | 7,930 | |
Accrued liabilities | 17,982 | 45,102 | |
Current portion of long-term debt, net (Note 2) | 29,451 | 32,119 | |
Long-term debt, net | 88,783 | 111,188 | |
Current portion of asset retirement obligation (Note 8) | 67,402 | 61,138 | |
Other liabilities (Note 1) | $ 16,531 | $ 47,398 |
SUBSIDIARY BORROWERS - Consol_2
SUBSIDIARY BORROWERS - Consolidation of Subsidiary Borrowers - Statement of Operations (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Subsidiary or Equity Method Investee [Line Items] | ||||
Total revenues | $ 142,411 | $ 266,485 | $ 400,316 | $ 731,297 |
Total operating expenses | 125,128 | 128,369 | 372,613 | 333,218 |
Interest expense, net | 9,925 | 16,849 | 34,960 | 54,915 |
Derivative (gain) loss, net | (1,491) | 38,749 | (41,560) | 109,892 |
Subsidiary Borrowers | ||||
Subsidiary or Equity Method Investee [Line Items] | ||||
Total revenues | 28,865 | 94,264 | 75,425 | 218,625 |
Total operating expenses | 18,807 | 19,776 | 69,297 | 52,961 |
Interest expense, net | 2,536 | 3,405 | 7,947 | 11,841 |
Derivative (gain) loss, net | $ (2,652) | $ 55,850 | $ (55,041) | $ 187,896 |
JOINT VENTURE DRILLING PROGRA_2
JOINT VENTURE DRILLING PROGRAM (Details) $ in Millions | 1 Months Ended | ||
Mar. 31, 2018 USD ($) | Sep. 30, 2023 USD ($) item | Dec. 31, 2022 USD ($) | |
JV Drilling Program [Member] | |||
Number of wells completed | item | 10 | ||
Number of completed wells in operation | item | 8 | ||
Capital Contribution Payments From Related Party | $ 68.2 | ||
Capital Contributions From Related Party During Period | 44.5 | ||
Monza Energy, LLC [Member] | |||
Cash Call Balance | 2.8 | $ 2.9 | |
Monza Energy, LLC [Member] | JV Drilling Program [Member] | |||
Amount committed by investors | $ 361.4 | ||
Joint Venture Working Interest Percentage Contributed to Related Party | 88.94% | ||
Joint Venture Working Interest Percent | 11.06 | ||
Oil And Gas Revenue Percent | 30 | ||
Well Cost Percent | 20 | ||
Capital Contribution Payments From Related Party | 302.4 | ||
Capital Contributions From Related Party During Period | $ 206.4 | ||
Monza Energy, LLC [Member] | JV Drilling Program [Member] | Mr. Tracy W. Krohn [Member] | |||
Minority Interest Ownership Percentage By Joint Venture | 4.5 | ||
Capital Commitment To Joint Venture | $ 14.5 |
JOINT VENTURE DRILLING PROGRA_3
JOINT VENTURE DRILLING PROGRAM - Consolidation - Balance Sheet (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 | Sep. 30, 2022 |
Oil and natural gas properties and other, net | $ 771,454 | $ 735,215 | |
Current portion of asset retirement obligation (Note 8) | 33,169 | 25,359 | $ 54,886 |
Other assets | 40,386 | 47,549 | |
Monza Energy, LLC [Member] | |||
Working capital | 1,471 | 2,515 | |
Oil and natural gas properties and other, net | 33,104 | 37,260 | |
Current portion of asset retirement obligation (Note 8) | 572 | 467 | |
Other assets | $ 10,805 | $ 11,571 |
JOINT VENTURE DRILLING PROGRA_4
JOINT VENTURE DRILLING PROGRAM - Consolidation - Statement of Operations (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Total revenues | $ 142,411 | $ 266,485 | $ 400,316 | $ 731,297 |
Monza Energy, LLC [Member] | ||||
Total revenues | 9,635 | 23,681 | ||
Total operating expenses | 7,046 | $ 10,805 | ||
Interest income | $ 147 |
ASSET RETIREMENT OBLIGATIONS -
ASSET RETIREMENT OBLIGATIONS - Changes to Asset Retirement Obligation (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Asset Retirement Obligations - Changes to Asset Retirement Obligation (Details) | |||||
Asset retirement obligations, beginning of period | $ 466,429 | $ 424,495 | |||
Liabilities settled | (24,918) | (61,285) | |||
Accretion expense | $ 6,414 | $ 6,620 | 21,641 | 19,536 | |
Liabilities acquired | 16,352 | 33,202 | |||
Liabilities incurred | 113 | 138 | |||
Revisions of estimated liabilities | 18,797 | 37,524 | |||
Asset retirement obligations, end of period | 498,414 | 453,610 | 498,414 | 453,610 | |
Less: Current portion | (33,169) | (54,886) | (33,169) | (54,886) | $ (25,359) |
Asset retirement obligations, less current portion | $ 465,245 | $ 398,724 | $ 465,245 | $ 398,724 |
SHARE-BASED AWARDS AND CASH-B_3
SHARE-BASED AWARDS AND CASH-BASED INCENTIVE COMPENSATION (Details) | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2023 | Sep. 30, 2023 USD ($) | Sep. 30, 2022 USD ($) | Sep. 30, 2023 USD ($) installment shares | Sep. 30, 2022 USD ($) | |
Cash-based incentive compensation | $ 3,751,000 | $ 5,091,000 | $ 12,188,000 | $ 8,158,000 | |
Restricted Stock Units [Member] | |||||
Granted, restricted stock units (in shares) | shares | 1,785,960 | ||||
Restricted Stock Units [Member] | Employees | |||||
Number of equal annual installments for vesting of units | installment | 3 | ||||
Fair value of award on the date of grant | $ 6.6 | ||||
Restricted Stock Units [Member] | Non-employees | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period (Year) | 1 year | ||||
Fair value of the RSUs granted on the date of grant | $ 600,000 | $ 600,000 | |||
Restricted Stock [Member] | Non-employees | Non-employee Directors | |||||
Granted, restricted stock units (in shares) | shares | 0 | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period (Year) | 1 year | ||||
Performance Share Units [Member] | |||||
Granted, restricted stock units (in shares) | shares | 1,289,720 | ||||
Performance period | 3 years | ||||
Fair value of award on the date of grant | $ 6,300,000 |
SHARE-BASED AWARDS AND CASH-B_4
SHARE-BASED AWARDS AND CASH-BASED INCENTIVE COMPENSATION - Summary of Share Activity Related to Restricted Stock Units (Details) - Restricted Stock Units [Member] | 9 Months Ended |
Sep. 30, 2023 $ / shares shares | |
Nonvested, beginning of period, restricted stock units (in shares) | shares | 1,221,461 |
Nonvested, beginning of period, weighted average grant date fair value per unit (in dollars per share) | $ / shares | $ 5.76 |
Granted, restricted stock units (in shares) | shares | 1,785,960 |
Granted, weighted average grant date fair value per unit (in dollars per share) | $ / shares | $ 4.06 |
Vested, restricted stock units (in shares) | shares | (486,134) |
Vested, weighted average grant date fair value per unit (in dollars per share) | $ / shares | $ 5.62 |
Forfeited, restricted stock units (in shares) | shares | (111,717) |
Forfeited, weighted average grant date fair value per unit (in dollars per share) | $ / shares | $ 5.72 |
Nonvested, end of period, restricted stock units (in shares) | shares | 2,409,570 |
Nonvested, end of period, weighted average grant date fair value per unit (in dollars per share) | $ / shares | $ 4.53 |
SHARE-BASED AWARDS AND CASH-B_5
SHARE-BASED AWARDS AND CASH-BASED INCENTIVE COMPENSATION - Summary of Share Activity Related to Performance Share Units (Details) - Performance Share Units [Member] | 9 Months Ended |
Sep. 30, 2023 $ / shares shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Nonvested, beginning of period, restricted stock units (in shares) | shares | 1,502,239 |
Nonvested, beginning of period, weighted average grant date fair value per unit (in dollars per share) | $ / shares | $ 9.78 |
Granted, restricted stock units (in shares) | shares | 1,289,720 |
Granted, weighted average grant date fair value per unit (in dollars per share) | $ / shares | $ 4.85 |
Vested, restricted stock units (in shares) | shares | (9,308) |
Vested, weighted average grant date fair value per unit (in dollars per share) | $ / shares | $ 8.13 |
Forfeited, restricted stock units (in shares) | shares | (231,175) |
Forfeited, weighted average grant date fair value per unit (in dollars per share) | $ / shares | $ 9.69 |
Nonvested, end of period, restricted stock units (in shares) | shares | 2,551,476 |
Nonvested, end of period, weighted average grant date fair value per unit (in dollars per share) | $ / shares | $ 7.30 |
SHARE-BASED AWARDS AND CASH-B_6
SHARE-BASED AWARDS AND CASH-BASED INCENTIVE COMPENSATION - Summary of Assumptions Used to Calculate Fair Value of PSUs granted (Details) - Performance Share Units [Member] | 9 Months Ended |
Sep. 30, 2023 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Expected term for performance period (in years) | 2 years 7 months 6 days |
Expected volatility | 76.10% |
Risk-free interest rate | 4.20% |
SHARE-BASED AWARDS AND CASH-B_7
SHARE-BASED AWARDS AND CASH-BASED INCENTIVE COMPENSATION - Summary of Restricted Stock Activity (Details) - Restricted Stock [Member] | 9 Months Ended |
Sep. 30, 2023 $ / shares shares | |
Nonvested, beginning of period, restricted stock units (in shares) | shares | 42,426 |
Nonvested, beginning of period, weighted average grant date fair value per unit (in dollars per share) | $ / shares | $ 4.95 |
Vested, restricted stock units (in shares) | shares | (42,426) |
Vested, weighted average grant date fair value per unit (in dollars per share) | $ / shares | $ 4.95 |
SHARE-BASED AWARDS AND CASH-B_8
SHARE-BASED AWARDS AND CASH-BASED INCENTIVE COMPENSATION - Summary of Share-Based Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Share-based compensation expense | $ 3,250 | $ 2,645 | $ 7,259 | $ 5,179 |
Restricted Stock Units [Member] | ||||
Share-based compensation expense | 1,506 | 1,240 | 2,949 | 2,852 |
Performance Share Units [Member] | ||||
Share-based compensation expense | $ 1,744 | 1,352 | 4,240 | 2,154 |
Restricted Stock [Member] | ||||
Share-based compensation expense | $ 53 | $ 70 | $ 173 |
SHARE-BASED AWARDS AND CASH-B_9
SHARE-BASED AWARDS AND CASH-BASED INCENTIVE COMPENSATION - Summary of Cash-Based Incentive Compensation (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Cash-based incentive compensation | $ 3,751 | $ 5,091 | $ 12,188 | $ 8,158 |
Lease Operating Expense [Member] | ||||
Cash-based incentive compensation | 1,142 | 1,532 | 2,710 | 1,994 |
General and Administrative Expense [Member] | ||||
Cash-based incentive compensation | $ 2,609 | $ 3,559 | $ 9,478 | $ 6,164 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Income tax expense | $ 4,777 | $ 16,397 | $ 16,413 | $ 46,801 | |
Effective Income Tax Rate Reconciliation, Percent, Total | 19.70% | 50.60% | 20% | ||
Deferred Tax Assets, Valuation Allowance, Total | 21,700 | $ 21,700 | $ 15,300 | ||
Federal | |||||
Income tax receivable | 200 | 200 | |||
Income tax payments | 2,200 | ||||
State | |||||
Income tax receivable | $ 100 | 100 | |||
Income tax payments | $ 300 |
EARNINGS PER SHARE - Schedule o
EARNINGS PER SHARE - Schedule of Basic and Diluted (Loss) Earnings Per Common Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
EARNINGS PER SHARE - Schedule of Basic and Diluted (Loss) Earnings Per Common Share (Details) | ||||
Net income | $ 2,145 | $ 66,721 | $ 16,041 | $ 187,700 |
Weighted average common shares outstanding - basic (in shares) | 146,483 | 143,116 | 146,451 | 143,026 |
Dilutive effect of securities (in shares) | 4,976 | 2,766 | 3,405 | 1,670 |
Weighted average common shares outstanding - diluted (in shares) | 151,459 | 145,882 | 149,856 | 144,696 |
Earnings per common share - Basic (in dollars per share) | $ 0.01 | $ 0.46 | $ 0.11 | $ 1.30 |
Earnings per common share - Diluted (in dollars per share) | $ 0.01 | $ 0.46 | $ 0.11 | $ 1.30 |
CONTINGENCIES (Details)
CONTINGENCIES (Details) $ in Millions | 1 Months Ended | 9 Months Ended | 12 Months Ended | ||
Jan. 31, 2021 USD ($) item installment | Sep. 30, 2023 USD ($) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Dec. 31, 2010 USD ($) | |
Additional royalty due to disallowed deductions | $ 4.7 | ||||
Decommissioning obligations | $ 4.7 | ||||
Additional decommissioning obligations | 2.1 | ||||
Loss of decommissioning obligations | 17.8 | ||||
Loss contingency in period | $ 20.4 | $ 20.4 | |||
Surety bond | |||||
Loss contingency | 8.9 | ||||
Value of surety bond | $ 8.9 | ||||
Resolved | |||||
Number of pending civil penalties | item | 9 | ||||
Annual installment | $ 0.7 | ||||
Number of annual installments | installment | 3 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) - USD ($) $ in Thousands | 9 Months Ended | |
May 15, 2023 | Sep. 30, 2023 | |
Repayments of Related Party Debt | $ 458 | |
Related party | TVPX Loan | ||
Purchase price of aircraft | $ 19,100 | |
Purchase price paid using cash on hand | $ 9,000 |
SUBSEQUENT EVENT (Details)
SUBSEQUENT EVENT (Details) - Assets in Central Shelf Region of the Gulf of Mexico [Member] - USD ($) $ in Millions | Oct. 20, 2023 | Sep. 26, 2023 |
SUBSEQUENT EVENT | ||
Gross purchase price | $ 88.5 | |
Subsequent Event | ||
SUBSEQUENT EVENT | ||
Deposit returned | $ 8.9 |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Pay vs Performance Disclosure | ||||
Net Income (Loss) | $ 2,145 | $ 66,721 | $ 16,041 | $ 187,700 |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Sep. 30, 2023 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |