W&T Offshore Report 3Q 2007 Results

W&T Offshore (NYSE: WTI) reported net income for the third quarter of 2007 was $36.3 million, or $0.48 per diluted share, on revenue of $255.2 million, compared to net income for the same quarter in 2006 of $66.7 million, or $0.91 per diluted share. Net income for the third quarter of 2007 reflects the impact of a $6.4 million unrealized derivative loss ($4.2 million after-tax), or $0.05 per diluted share, while net income for the third quarter of 2006 included an unrealized derivative gain of $22.7 million. Without the effect of these unrealized derivative gains and losses, net income for the third quarter of 2007 would have been $40.5 million, or $0.53 per diluted share, and net income for the corresponding quarter of 2006 would have been $51.9 million, or $0.71 per diluted share. See "Non-GAAP Information" later in this release.

Net income for the nine months ended September 30, 2007 was $94.9 million, or $1.25 per diluted share ($1.46 per diluted share without the effect of the unrealized derivative loss and the loss on extinguishment of debt), on revenues of $774.3 million, compared to net income of $161.0 million or $2.35 per diluted share ($2.21 per diluted share without the effect of the unrealized derivative gain), on revenues of $536.1 million for the nine months ended September 30, 2006.

Cash Flow from Operating Activities and EBITDA: EBITDA and Adjusted EBITDA are non-GAAP measures and are hereinafter defined in "Non-GAAP Information" later in this press release. Net cash provided by operating activities for the nine months ended September 30, 2007 increased 34% to $472.7 million from $351.5 million in the first nine months of 2006. The increase was due to significantly higher revenues, partially offset by higher operating expenses. Adjusted EBITDA was $567.6 million for the nine months ended September 30, 2007, compared to $434.1 million for the prior nine-month period in 2006.

Production and Prices: Total production in the third quarter of 2007 was 16.8 billion cubic feet ("Bcf") of natural gas sold at an average price of $6.45 per thousand cubic feet ("Mcf") and 2.0 million barrels ("MMBbls") of oil sold at an average price of $72.72 per barrel ("Bbl"), or 28.9 billion cubic feet of natural gas equivalent ("Bcfe") sold at an average price of $8.83 per thousand cubic feet of natural gas equivalent ("Mcfe"). This compares to production of 15.4 Bcf of natural gas sold at an average price of $6.58 per Mcf and 1.8 MMBbls of oil sold at an average price of $62.08 per Bbl, or 26.2 Bcfe sold at an average price of $8.14 per Mcfe in the third quarter of 2006.

For the nine months ended September 30, 2007, total production was 55.5 Bcf of natural gas sold at an average price of $7.17 per Mcf and 6.1 MMBbls of oil sold at an average price of $61.49 per Bbl, or 92.2 Bcfe sold at an average price of $8.40 per Mcfe. This compares to 37.5 Bcf of natural gas sold at an average price of $7.35 per Mcf and 4.3 MMBbls of oil sold at an average price of $60.48 per Bbl, or 63.3 Bcfe sold at an average price of $8.46 per Mcfe for the same period in 2006.

The increase in volumes is primarily attributable to the properties acquired by merger in the Kerr-McGee transaction, partially offset by properties that experienced natural reservoir declines.

Lease Operating Expenses ("LOE"): LOE for the third quarter of 2007 increased to $51.6 million, or $1.79 per Mcfe, from $35.2 million, or $1.34 per Mcfe, in the third quarter of 2006. LOE for the nine months ended September 30, 2007 was $169.2 million or $1.83 per Mcfe, compared to $68.7 million or $1.08 per Mcfe for the same period in 2006. The increases are attributable to higher operating costs, hurricane repairs, major maintenance expenses, and insurance premiums, partially offset by lower workover expenditures. A significant portion of the increase is attributable to properties acquired by merger in the Kerr-McGee transaction. The Company believes the incurrence of such costs following a large acquisition of properties is not unusual, and the magnitude and timing of additional workover and maintenance expenditures on the properties acquired by merger in the Kerr- McGee transaction may fluctuate as integration of the properties continues. The remainder of the increase in operating costs is primarily attributable to new production and increases in service costs.

During the third quarter of 2007, the Company reclassified certain industry related reimbursements for overhead expenses from lease operating expenses to general and administrative expenses in order to better match the underlying reimbursement with the actual cost recorded. All prior year amounts have been reclassified to conform with the 2007 presentation. The effect of these reclassifications had no impact on net income.

Depreciation, Depletion, Amortization and Accretion ("DD&A"): DD&A increased to $123.1 million, or $4.26 per Mcfe, in the third quarter of 2007 from $85.5 million, or $3.26 per Mcfe, in the same period in 2006. For the nine months ended September 30, 2007 DD&A was $373.4 million or $4.05 per Mcfe, compared to $201.9 million, or $3.19 per Mcfe, for the same period in 2006. The increase primarily reflects higher finding and development costs and increased production volumes.

Capital Expenditures and Operations Update: In the third quarter, the Company successfully drilled one exploration well (see table below). For the nine months ended September 30, 2007, the Company has drilled or participated in the drilling of three exploration wells and two development wells. After the close of the third quarter, the Company drilled one non-commercial well at a cost, net to our interest, of $7.3 million (see table below).

For the nine months ended September 30, 2007, capital expenditures totaled $277.3 million (before dispositions of $3.7 million), of which $162.3 million was spent on development activities, $71.6 million for exploration, $43.4 million for seismic, leasehold costs and other capital items.

During the nine months ended September 30, 2007, development and exploration capital expenditures consisted of $98.7 million in the deepwater, $34.5 million on the deep shelf and $100.7 million on the conventional shelf and other projects.

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