- Earnings call transcript Q3 2022

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Ladies and gentlemen, thank you for standing by. Welcome to the W&T Offshore Third Quarter 2022 Conference Call.

During today’s call, all parties will be in a listen-only mode.

Following the company’s prepared comments, the call will be open for questions and answers. [Operator Instructions] This conference is being recorded, and replay will be made available on the company's website following the call. to Coordinator. conference like Petrie, to now Relations Investor would turn over the Al I ahead. go Please

Al Petrie

Thank you, you on quarter like call Gary. And review XXXX to I management to results. welcome would financial team, and all Offshore's of W&T to operational conference behalf today's third of the

from to to I could anticipated that our a statements. the of you factors comments differ should may expressed Before we forward-looking remind It noted begin, include W&T's be results actual cause materially would like expectations these or that forward-looking statements. results variety in

release that, I Additional financial to like release SEC. call refer issued financial XX-K, the Tracy information concerning these XX-Q as Chairman the we factors Krohn, as Form are non-GAAP with non-GAAP of contained the X-K Today's CEO. in call Please that yesterday would our With issued to reconciliations our earnings to our results. and our over on measures may earnings we public that also filings to turn well GAAP for certain measures. yesterday and contain

Tracy Krohn

thank good call. and third to everyone, quarter joining for Al, and for Thanks, XXXX us day conference you our

today our and Financial Executive answer questions Executive and call. Janet with the Chief both another are Operating VP William be VP Williford, Officer. Chief available to So Officer; and They're me to Yang, going later during

years of best in quarter XXXX and the track our profitable third be financial the we maintained our one results strong So is on long to history. in and

build opportunistically flow; high-quality been has conventional always cash value. production strategy and to on opportunities very capitalize maintain simple, free generate accretive Our shareholder

outstanding continued results significant strong third operational in in driver and XXXX execute in has excellence to have maintain been ability quarter. the and a financial our Our

net of $XXX.X EBITDA delivered equivalent reported are in these million of the of the third barrels quarter. $X.XX per generated day solid maintained quarter. adjusted $XX.X of accomplishments and production share guidance. or per at at We XX,XXX income midpoint million we We the oil key So in the

and XXth of had third the free For flow. that disruptions cash free everything, we includes million supply chain produced the flow. cash the throughout positive $XX.X in quarter consecutive quarter, we COVID and And

adjusted both $XXX.X adjusted to from $XXX.X EBITDA increased cash equivalents Year-to-date, flow. a in in XX% flow XXXX. million and considerably grown have cash totaled and Our million ago. in EBITDA up and we've $XXX.X cash free free year We million, cash

with our hand-in-hand been reduction in net So growth has debt. cash a in

almost to months XXXX. X.X our with net Xx XX% as Our maintained ago, or well $XXX.X improve year-over-year a continued by XX, year to stated goal momentum our September net outstanding X.X another of to $XX.XX, and adjusted And EBITDA quarter. X.Xx no equivalent significantly down positive ability experienced X.Xx XX team in turns below We've than at small year-end. finance quarter, oil which price the of trailing is to realized level. debt operations thanks barrel also is our higher our of compared we a or million less to was course, of debt part, to execute kudos both per derivative down folks of In to our third the before and quarter, from and settlements turn the pricing second sustained X% high offshore

price was Our average per $XX.XX for realized barrel. oil

barrel derivative settlements. per natural $XX.XX per before realized Mcf $X.XX we NGLs, in case For each and for gas,

base from quarter. equivalent recompletion and and the we third only day in spent third quarter. workover per online conventional about Our down prior wells come XX,XXX We in successful had production of to oil $X.X the CapEx minimum sequential our Nonetheless, no decline, X% experienced was quarter only production the and million new thanks $XXX.X $X.X barrels of strong XXXX we years of pricing EBITDA numbers. and first EBITDA generated now adjusted free of cash generated nine and in production of almost in months continued To both resulted combined, We've for put program. this perspective, million flow in of outstanding EBITDA. strong The XXXX adjusted combination and our XXXX. adjusted asset billion

we've quarter marked generated positive that also XXth that free quarter Third flow. cash the consecutive

free XXXX more were of So in XXXX cash that million, the first the combined. nine cash generated double flow in than we our XXXX months is and all free of flow $XXX.X

we're we on financial on stronger clearly to So and results. focused execution build in today, solid a position much these remain operational

we did that to did production production in five perform to benefit that not out wells recompletions quarter. plan XXXX on and to recompletions quarter, the workovers and third moving drill continue additional pay operations. quickly. any the can in workovers We positively perform Now new impacted during two but We and

to because We're now long-term originally obligations, opportunities. drilling ramp to have up timing expect capital in capital we and commitments no expected we in flexibility have defer or anticipating near-term early spending deferrals rig So XXXX XXXX. related was or that drilling late

the midpoint to million. $XX As CapEx million $XX $XX by a reducing XXXX result, we’re between at range our million and for

despite to latter regard for well in a long-term Field rather permitting and very well of drilling, us in second This the processes in as XXXX. future in in of Now Grail buying Holy Garden Magnolia potentially going items the at XXXX. currently lead quarter our preparation large production XXX we’re FEED is increase part into as long and the Banks

meet down continue a we to will with on opportunities accretive meaningful while low criteria, debt debt. amount to and acquisition of systematically hand, our So net evaluate cash paying

stable and and due quarter net Our the the prices. higher to third the in decreased from million throughout XXXX gas in cash and by strong to increase driven cash $XXX.X flows equivalents natural debt resulting of oil million cash $XX.X by production quarter,

comprised September $XXX.X under XX, and availability of $XXX.X equivalents of available in credit liquidity cash revolving cash borrowing million, had facility. $XX and of million we XXXX, million our of as Now

that revolver we in January noted or and facility recently the As for the XXXX. and to amended our expanded date credit extended release agreement commitment maturity X, yesterday,

we’re continue of to $XXX access equity to November these repay our refinancing evaluate Should on we’re remain to prior free of $XXX we hand notes to So expected future capital in XXXX, unused maturity confident million second – notes senior second and cash flows, aftermarket lien markets our substantial regard our program. options. our out able to million that cash due volatile,

Additionally, million liquidity to natural credit million we our can have currently are that $XX and on worth facility calls $XX undrawn gas be $XX million in that monetized quickly.

facilities be for ahead between expense operating of and that activity. to lease same is and LOE quarter to day our $XX Looking and and $XX some is barrels be $XX production are the equivalent to quarter fourth million million, expected of guidance expected of has the fourth inflation workover entire which XXXX, XX,XXX $XX increased industry reflects per and million. million for G&A fourth between quarter Cash XX,XXX the to cost costs includes estimated between expense the costs faced. G&A oil

related items adjusted range for planned opportunities. in budget which expenditures $XX to our as facilities, and long well this XXXX third to part Included year, budget costs an to ESG actively in lead incurred full and million. to range drilled excludes regard greater abandonment Grail P&A in leads to reduced our is primarily well focus is expenditure to we costs recompletions. in we later million of anticipated. Our expenditures, receiving for including with for quarter, previously Holy between was Grail capital the expenditures to XXXX the than a had $XX for requirements capital date, expenditures Holy $XX spending the fourth important year our well our leasehold, wells In our $XX.X ARO as given earlier acquisition for Continuing related The and capital quarter reduction seismic for already for to riser million million million are permit incurred sustainability. $XX and to address the for the this long-term

guidance release. all reminder, our in can a found press of be As yesterday’s

closing, has been in financially. So year operationally an outstanding for XXXX us and

price As this continued you positive continuing with flow. expect production poised in to we free our see, that commodity to for success support on stable cash environment outlook can we’re generate strong

and we the growth record far and thus expect XXXX, quarter. have adjusted in We cash generated flow continued EBITDA in fourth free

and RBL and cash of calls position to refinance additional eliminate position. our to $XXX in of equity or debt flow decreasing of from our program substantial operations provide ATM to Our to ability monetization sight million generate million $XXX.X long via either liquidity an line million, clear undrawn free sales access cash $XXX

been a to on So Gulf position of Mexico balance provides financial four Gulf evaluate and and growth poised we’re our opportunities, pillar producing continue strong our the to focus of believe assets, with of and opportunities organically basin to We long-standing in sheet. leveraging world-class inorganically, our manage strong meet with be experience opportunities quickly evaluate our criteria both prudently of us and on We’ll execute the that will always to nearly has improvement optionality continue within area our accretive Mexico decades success. flexibility a while continuing moving our key execute is forward. and to

a have rates portfolio We and Mexico the low deepwater significant water properties both premier decline shallow Gulf and of have that in upside. of

shareholders, public aligned of the stake team’s in one of our those our which management given are Our any equity, interests is of highly XX% W&T’s with E&P highest company.

look can now XXXX did copy excited So continued W&T operator, hear success for and Operator, forward you you we as the for I’m to did right open – lines shareholder, With a in and future beyond. about that, questions. that? the

Operator

ahead. from is Capital. Our go John first question ROTH Instructions] [Operator with White Please

John White

and very a morning Good on fine quarter. congratulations

Tracy Krohn

Thanks, John.

John White

minor CapEx reduction is the lack is to the of had oilfield for that riser the On the mentioned service – the reduction, availability Grail? you equipment, CapEx related of Holy

Tracy Krohn

acquire I as the wanted of it’s had approach to a same more this associated and Betsy where No, And a is examining to concerns made have The to methodical with focus good it very items. We’ve permitting. way the as we with in goal. can’t disagree itself effort riser they’ve to make safe worked and And we pretty some really course, long-lead it. possible. took

a do very we dry of that already what that and about new floating need think – what single-barrier we’re I called hole we place barrier before have on talking were and to in regulations. risers are in-depth trees single a facility understanding

wants So delays, being in been relatively sure – right, on affected really that well we’re they’re would the that, we able want But more doing location. delays as and There right to to they’re some on a make not have Betsy longer-lead have make rig put sure well. items. to but

completely permits rig Betsy a We’re the buttoned with location. have up in to that now on putting start and phase working

John White

Thanks Grail. working for Holy your to What’s interest there? that detail. Back

Tracy Krohn

XXX%.

John White

quarter ST SS #X, then slides coming? that’s to another Northeast, the got And XXX fourth that Fantastic. show scheduled you’ve one, is for XXXX. How your

Tracy Krohn

program to We’re we ends end going as of to for up the go year the see at commitment our regard drilling. set to the compare made and available we that the of with with where opportunities that other

John White

position. financial the I’ve followed never company I’ve or you the a company Okay. years. covered of number seen stronger a in for

again. congratulations So

Tracy Krohn

you John. much. Thanks, very Thank

John White

I’ll pass it back.

Operator

is The Derrick go Stifel. question next Please ahead. Whitfield with

Derrick Whitfield

for Good my all and morning, taking thanks questions.

Tracy Krohn

you, Thank sir.

Derrick Whitfield

to could and respect With QX? that Neptune if on guidance, the temporary at field reasonable Bay downtime QX some Mobile color maintenance Field unplanned and you before – at be could is the downtime offer

Tracy Krohn

sure. Yes,

We’re and unplanned generate a down overcome And to having pipeline excuse maintenance they’re repaired – and than Bay That’s Field. Temporary – blockage It’s work plan about Mobile barrels downtime longer and risers clamped doing would take. that, some planned at is that. a it operated anybody the the X,XXX at leak was day of there. been There’s resolved outside want success downtime again, They’re Neptune want oil midpoint. just at the at related. in per off. of to the to this to one would me, downtime taking trying

that a as of continuing operation. see type didn’t we So

that’s primarily the causes there. So really

Derrick Whitfield

permit? Terrific. it you with side. Do guys Holy though – regard as With regulatory have longer sounds it guys taking primarily with sorry just the Grail that. do about have delay is you guys advancing slight concerns the simply in And that’s to attributed – you the process? do to any to that, the well, any Or

Tracy Krohn

No.

taking to conditions, We’re before process a need advancing satisfy well. that not longer. permit certain which with drilling approval actually The to thinking start we have We’ve a it. we concerns we subject is got

rig the permitting. too much not really of and the ready So started. this There’s – concerned do to on point, I’m about prep we the get to need platform site. I’m to At not putting efficacy that the to we’re be

Derrick Whitfield

Thanks helpful. time. your That’s for

Tracy Krohn

Thank you. Sure.

Operator

Research. Instructions] ahead. question [Operator go next Tower Robertson from The Water with Jeff is Please

Jeff Robertson

can a from Thank in second think respect to you. Tracy, the notes. you liquidity about you lien standpoint, with refinancing XXXX about talk how conceptual

opportunities the in the to to notes market, acquisition the cash company the of take powder You added in how generate positioned to about million just program quarter. year? in in positioning $XX perhaps to at lot opportunities third in is also enough and sheet advantage balance a XXXX. as free balance and of capital and you do cash the sheet But look with W&T next those flow you the dry think

Tracy Krohn

it Thank choices be sure That's to fortunate that bondholders to We're we're fortunate. million refi. a successful hard the in lately stock And hesitant in we trade fortunate increases make of pretty that necessarily we with regard to not hedge picked or of you. affected the by so enviable result flux purposes, how gas matter and We've in the question, what calls. very been been being made will. able us have planned being was can interest for protective on protection. a we With can notes. in It's another if $XXX out market Markets were be somewhat Jeff. to you arguably up can. certainly great whether refi, We and good just Fed to that the long some turned rates that. give a or to here the and We've a refi. repay this we with position to not of these speak, We knowing regard but as

patient up. debt is can we that repay acquisitions is So over we but or then handle tight worse refi the we know And any and come case, reload we we here time. worst might – hang not we're to one and being the that thinking one somewhat next that just a potential

you'll that. do with I That say to not that kudos in it. the making the to our feat. position best And can where And something that's you can simple a about possible. and be so my we're have is team for And It's blessed fortunately good to a optionality. do

Unidentified Analyst

Yes.

the balance the you estimate to to – can as you think cost? to give At Mahogany happens at market that Grail, being dictate sheet share subject what forces. I appears opposed will all of to what Holy better well an terms

Tracy Krohn

drilling complete. estimates current The XX are Yes. around

Unidentified Analyst

And if second be the half – quarter, should it correct? XXXX. you to you that it think you spuds I said in in would expect the of second on Is

Tracy Krohn

Probably quarter. – sir. yes, quarter fourth fourth Yes, probably the

Unidentified Analyst

you. Okay, thank

Tracy Krohn

Yes, sir. Thank you.

Operator

is Whitfield question go ahead. a Stifel. follow-up next Please of The Derrick from

Derrick Whitfield

guys. Yes,

And question, and more you of I ask a to similar really a environment seeing to speak onshore, commodity Just could question the backdrop? less one certain flow present? as quick strong the follow-up wanted economic at Jeff's and to are greater if guys of A&D relatively build on in result you prices GOM deal a

Tracy Krohn

Yes. I can say that.

I markets. have think greater what is we seen volatility in in pricing

to I better higher everybody's thought I've how they're execution things. proceed acquisitions these acquisitions. always and environments. affects that think lead going the Very environments everyone to we high pricing pricing pricing with low that told often, see in make process about on we environments

of some a when make now, also do Fortunately, acquisition, since debt, equity we we've availability being Normally, hedging we help piece nearly attach we little to years had a have it. protect able some to XX the those acquisitions. larger of XX, but to of

that making are acquisitions accretive. that, very with and of So they sure cognizant we're

do So that ratios. would our anything also balance we in to certainly our would that accretive to be seek we leverage would protect sheet

Derrick Whitfield

the Terrific, color. thanks for

Tracy Krohn

sir. you. Yes, Thank

Operator

Showing our turn no for to questions, would closing like I further session. conference remarks. back question-and-answer Tracy the this to Krohn concludes any over

Tracy Krohn

Again, that. now after it's a can the forward sheet feels the think in it I'm with position rest looking looks the good for acquisitions. make is the pleased you financial with and it company of been I years good where year well and further as debt or We're the amount quarter balance our and way of I to to the the to debt making a future and where very be us. be this a happen. very leverage operational we right like reflective modest teams all accretive this our into of to off are. carry by pay

just company I'm it delighted and in this themselves. very making here does to still So be stronger nobody by

for that getting So our teams my appreciation to done. sincere

again you to talk we'll that, with So soon.

Operator

conference you today's The for concluded. Thank now attending presentation. has

disconnect. You may now

W&T Offshore (WTI) 9 Nov 222022 Q3 Earnings call transcript