Earnings call transcript Q1 2023

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Operator

Ladies and gentlemen, thank you for standing by, and welcome to the W&T Offshore First Quarter 2023 Conference Call. [Operator Instructions]. I would now like to turn the conference call over to Al Petrie Investor Relations Coordinator.

Al Petrie

Thank you, Jamie. And on behalf of the management team, I'd like to welcome all of you to today's conference call to review W&T Offshore's First quarter 2023 financial and operational results.

like statements. you I'd may our begin, forward-looking include we to that remind comments Before be that from should statements. actual or It noted expressed results cause factors expectations to W&T's could differ these materially in the results a anticipated forward-looking variety of call non-GAAP measures. contain certain also may Today's financial yesterday of refer non-GAAP Please issued the forward-looking on release earnings disclosures to measures statements we that for and reconciliations

Tracy like Krohn, turn over our and I'd the to that, to With Chairman CEO. call

Tracy Krohn

They're for Financial joining day today VP to everyone, Williford, our you the serve With Officer; CFO for our as Trey Hartman, who and Thanks, our successor. answer Officer, this search Al. me us as thank are Executive Good available later questions morning. VP Chief Officer; all Operating Executive call. to Yang, during Janet interim also Chief and and will we and Chief Gen Accounting a William

of and moving notes. XXXX reducing forward XXXX debt we outstanding interest payments and our second redeeming while lien maturities. second our our XXXX moving strengthening notes all balance lien -- debt new and sheet So by forward our began significantly issuing

also and strong flow another quarter generation We EBITDA generation. of cash adjusted delivered free

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

we key some first to so out at do accomplishments years, property acquisitions would and continue to to while and integrated point quarter. the have Over producing for excellence, infinitum. seamlessly plan maintaining strong we operational highlights like the I

we per $XX.X solid or EBITDA diluted $X.XX net share $XX million. generated of adjusted million So and of reported income

produced downtime by despite XX,XXX and of unplanned gas pipeline downturn facility And and cash Bay other diminished projects consecutive free planned reported per nonoperated We temporarily in and both barrels at free cash positive of by Mobile at fields. flow XX Production maintenance equivalent was day. oil production generated a quarters. have of in pricing. we QX XXXX, million for $XX.X oil natural We flow

earlier the $XX second mentioned second January, capital principal reduces in about any forward we payments and paid structure. -- $XXX off our I XXXX million benefits notes. notes lien As moving near-term million XXXX lien us fully issued million by interest $XXX.X of annual in as it remaining eliminates and pull maturities This we outstanding in our

use we along So quarter with proceeds still ended prior our first and to some new redeem the of with equivalents notes cash cash cash notes from $XXX.X and million. the of the

improve XXXX, X.Xx our well EBITDA million ago, our goal decreased than adjusted So overall March XX, stated XX net months $XXX.X continued at significantly this to to net X.Xx our and which to of Xx. compared less to trailing below debt is to year debt a

and the adhered teams both clearly deal our finance outstanding and and a results. of helps Gulf asset our as success I Mexico execute to is believe continued ability delivered consistent our to and the with that driven base the we great in strategy of by Gulf a that. asset operations our at So sustainable level in high

conditions, cash and flow continued XXst quarter record prices marked free we've free geopolitical through changing reported the of first again, the flow. that we So deliver low generated cash economic XXXX and to consecutive have

building of stronger have XXXX. execution discussed for in compared in for improve estimated to that results. that the Mobile last with underway guidance operational sheet, The Mobile to days quarter on on and planned first maintenance of facility today, call, we and XX clearly the ability would the we quarter Bay So outstanding production the These focused to pipeline required down provided days financial remain field. our Bay a field in in debt our projects of fuel we period range we at to balance temporarily our out shut in XXXX, us that the shut we're coupled and the activities at first XX much XXXX pay continue in position

some We but lower quarter. XXXX and also nonoperated contributed shut at experienced X back downtime most our to production that in These levels, volumes QX in nonoperated now unplanned events of production that online fields and also the reduced the are fields the were first at range. temporarily project the the equivalent of per our QX XX,XXX production, Despite day. having production barrels Total Mobile maintenance barrels oil of we're above company was completed. for overall Bay the approximately mostly guidance was production million has XXXX quarter our lower recovered oil currently X.XX

production equivalent our per recovery guidance XXXX numbers with day. production our XX,XXX midpoint see barrels QX expected about You an in at in the oil of

We year our guidance. full haven't 'XX changed

on We last than drilling the many few have over focused new wells. on rather years acquisitions

the guidance much reflects decline of with natural onshore asset our base low in declines unconventional reservoirs. Our higher compared

and on On And the We XXXX. and margin about despite X for for quarter be first operating is the $XX our quarter, guidance X.X% results environment than we but expense cost lower to inflationary in in see to guidance expected quarter $XX inflationary of actually, side, million. were midpoint remain between we're encouraging we pressures focused the industry, the and lease below the expansion. continue were cost our control second million as

the range in We guidance our to within $XX continue quarter control were at G&A cash first our costs million. costs G&A

and downward. quarter, cash is second trend $XX.X between G&A That's be million million. the expecting we're $XX.X For to the

So maximize continue manage will we our costs controllable margins. to help to

debt $XXX.X During first XXXX. debt million. the million almost same reduction from $XXX.X a At cash so huge reduced was which total the the million, end was year, net them. total million, debt of the of quarter we and net $XXX.X million, At last from time, debt of net cash first of of $XXX equivalents $XXX.X we year-end had quarter, XXXX, by of

liquidity. rodeo. cash significant we second So XX% the not million instead, net, second so $XXX notes, down in the the have down previous pay and all previous opted we first our that's lien And notes paid of although lien to maintain

we're is did. that opinion current glad we Our

that $XX.X and we in spent focused In acquisitions. CapEx between million Though for range continue million. as Magnolia CapEx of little in in issuing have long cash, wells to to capital second leasehold XXXX, X reduction totaling driven a $X.X $X.X while and lien or and second planned related commitments those to par rig debt shelf we As near-term our prospect costs debt as at obligations, proceeds additional drill lien anticipate build Because this make engineering senior senior cash later on XXXX net current considering position defer in and flexibility design Included facilities, Grail lien drilling to drilling items, continue dry portion all have I XXXX the QX and continue lead acquisitions, ramp are the Holy large a Last capital well to previously, million no $XX considerable expenditures and offering seismic to and paying private mentioned year, prospects on invested million for $XXX to reducing down and at we in range XXXX in second powder long-term recompletions. expenditures of we're opportunities. the front-end be further our along all have and our by notes. million for capital $XXX notes was held retire capital up our with flexibility we to debt. million or we using

our generate we through on plans flexibility accordingly. as free cash prices we'll which year execute and always, capital provides us they quickly our and to expect modest the spending to creative commodity opportunities With in adjust As range XXXX, flow meaningful the arise. monitor

and ESG about close like into contributing provide to with XXXX our ongoing I short-term efforts, environmental and communities plan, information the work some more cards to call, our were we our our incentive the corporate culture. metrics employees moving governance and cornerstones we're and forward. to continuing that of where I'd before practice ESG stewardship, sound So operate incorporated positively

a our oversees effort improvement in As standards guide to Dr. a business as world-class ESG our our our Environmental help problem highest reflected Governance experience definitive of will ESG metrics. We the efforts. and perspective will that solver is continuous improving unique the we've on ESG XXXX did filed, the new Chang voice made governance. successful recently that assist statement, to commitment Safety addressing she scientist He also Nancy week, concerns our and corporate in Dr. Board. in is and we and us successful career Last the and Reserve our to announced proxy and and broad-based unique addition of Committee a concerted Board member, shareholder business our Federal Board a brings whose Houston. we to and in Chang, new of believe Chair here Nancy bring highly our perspective a

as W&T financially. for in very pleased in I both to well we're beyond. well are our thank XXXX, we closing, and and team started in continued we strong at So have I'd like believe success XXXX positioned operationally how

and So extension, maturity was debt and us financial our enhanced debt our which provides optionality reduction with forward. to remaining flexibility our with from XXXX, strong position, moving XXXX significant net debt

cash enables long-standing on is the our poised with be and believe we're that improvement Mexico to producing will liquidity execute opportunities and evaluate strong to And Our a world-class We inorganically. continue position opportunities, both to continue basin us and to growth Gulf meet organically accretive assets. criteria. of

on pillar our within a So our opportunities quickly focus executing is evaluating success. and area of

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

of those equity, shareholders, team's And of beyond. So our public are continue open W&T's Operator, our company. in E&P questions, is XX% lines highly right a M&T's about XXXX with any given of be shareholder, aligned I please. which to and we our interests the can enthrolled for one in future stake the highest management very as

Operator

first John question from from White Roth Our Instructions] [Operator comes MKM. today

John White

part of and maybe deal morning, and we or let's haven't get getting you, little but you might not Thank up be on ahead everybody. into here, August midst promising operator, September, in throughout good activity latter you're a where if a drilling assume found would -- things a deal, the point time working you a of of and XXXX? the pick in that

Tracy Krohn

sir. yes, possibility, a That's

characterize I very Is noncore made oil Where E&P companies Can it no secret companies? And you selling you looking major previously predominant Okay. mean private Or activity? sellers? you equity-backed active acquisitions. is assets? for the you're -- it most you see the do

the some present probably of that will themselves there Yes, also and be it's above, interim. others all in the will

these greater of we would out pay the been all anticipation of opportunity liquidity much our kind was the to to our ahead but of have did risk we what in and debt, go had Fortunately, of at liquidity. We opportunities. boost that opted

the So made the would was thing, good I and that that call. think right liquidity decision was a be

certainly that. have a of prepared for you're Well, and history successful dealmaking you

it I So the back tuned to will and we will stay pass operator.

John White

Thank you, sir.

Operator

from question Woodfield And Derek Stifel. from comes our next

Derek Woodfield

guidance XXXX despite material to QX focus downtime you QX. planned guide first wanted if guidance your my QX are to impacts those on impacts you quarters? on in I unplanned the ask speak if with there for QX? of maintenance could light in the and and reiterating any We trajectory In expected stance And question.

Tracy Krohn

Well, we more corrosion let Mobile at contact the first. me we a power. address had And little anticipated. No, had with it certain a some maintenance issues Bay than had

You don't and inspect This know things aiming sulfide them. hydrogen contactor. and up these open until a you was

was very to for it important So us get right. this

production that little We HXS in have field. a

we So repair, down that to this taken time sure make XX it years we was last ago. it the was wanted had

So sure the in we down make taken anytime future. wasn't to wanted it near

QX as of expectation. up in and as that's far the ramping QX, yes, kind So

as help interest is addressed see think in well. a classify of bit have haven't increases us feeling we It's production that here, lot But we that well a I the there's would nonoperated hopefully in some we as there. yes, little quantitatively. that, what as could to overall fields hard other that that are that that

Derek Woodfield

with from carbon And circle Terrific. your wanted then QX. regard I to market, remarks to capture to back

thoughts you've the Now on you time perhaps that to pursue like goals your your to are how with the you'd CCS efforts, advance that to more could speak business? evolving had

Tracy Krohn

on course, Sure. a been and a this time. We -- of for looking keeping long we've press it at

portfolio accommodate of in this both of they offshore. reservoirs onshore reservoirs, can and kind our injection, numerous have saltwater We

of flu future. of deal part the confident money. effort I relatively a we're great in will the don't be the research will and that a from most intend spend this of portfolio our to stack. the The first be So foot

how So as adjustments expertise of technology far most is going ours. be by to greater to whose done than that's And is then will is the where made people there that be.

of produced sort been would them than of company. carbon X expect from W&T period out massive be time, flaring we an properties for that don't footprint a expect We We net of No. additional have the in that long Mexico, amounts we of a to longer Gulf and We without fracking, take other properties buy they those produce thing. is of creating probably drilling, companies and

thinking business. come that So idea of a will be than into more the follower that leader we we in a of

Derek Woodfield

responses. your and Perfect. Thanks for time

Operator

[Operator from Instructions] Our next Jeff question comes from Jeff Robertson Robertson

Jeff Robertson

you recent lease XXXX pickup this you maybe can the 'XX. can asset Tracy, how most not sale in into but and about or talk the your how the plans, the you year, base picked leases -- talk about necessarily up fit

Tracy Krohn

question. Yes. Unfortunately, Jeff, very a good that's

We leases those haven't yet. awarded been

while a So haven't been we we were bidder, leases. awarded high the

it's a So about talk are to premature awarded. they for it about happy as be talk I'll as me little soon that. to

Jeff Robertson

award have Just might it on bids feel you a sale? to the from take long do process OEM and how the leases this

Tracy Krohn

that process within XX Yes, lease days about They itself. sir. of the sale normally

about to going XX what idea we So we're have good XX next days, -- probably a do. they're should to in the

Jeff Robertson

of... terms In

Tracy Krohn

not just premature to would for to so. able I I that. that elaborate be Again, apologize on it do being think

Jeff Robertson

Okay.

of just size, have, liquidity you acquisitions about about Tracy, much the how to debt acquisitions, between how want depending that you terms financing you'd obviously, think can In sheet balance with on cash the use? talk and you

Tracy Krohn

would equity say And sell piece see be leverage I and -- and probably we transactions probably expect we let's a a you then would paying on down expect see should transaction. that later, bit billion off was define say, as lever -- larger well. up probably when you then it how up a depends We we'd would of But that $X a little as would to to In we large. Sure. temporary little quickly.

Jeff Robertson

target So keeping you flow. would cash in generate past, amount obviously, of that your a assets with significant

Tracy Krohn

Yes. policies doesn't Yes. This change over work. company is -- the its time that

quite with for bit selling to little would is equity. up. to So a yes, of accommodate We now. X. and usually that then within It's acquisition right pretty than known off We flow want levering go a cash bit that essential leverage us. probably generating that higher around bounds stay tamper of

Jeff Robertson

you. Thank

Operator

over ladies in to gentlemen, at point for back remarks. showing like Tracy Chairman turn no Krohn, to And questions. this and I'd floor CFO additional and closing the

Tracy Krohn

she's she an it forward. things her, whole family. is to other other thank that. to you else going even minder facilitate company other Janet One to publicly Thank miss operator. well, out hope very her. as well, very some The has service for you minor to like not out her But do with family wishes I that deal wish city and Thank sad detail everything well. comes needs I'd Yang way. her very like Janet in to -- little what was little miss much, opted actually and state you of that move to We're before would It's going wish XXX% I and that our the One company somewhere opportunity for as we we're for and another to to and leaving. I them CFO the much. go

Operartor

conference with Ladies today's attending thank presentation. and for that, call. gentlemen, we'll you conclude We today's

lines.+ now disconnect You your may

W&T Offshore (WTI) 10 May 232023 Q1 Earnings call transcript