W&T Offshore's Year-End Proved Reserves Dive 23%

W&T Offshore's estimated total proved oil and natural gas reserves at December 31, 2008 consisted of 43.9 million barrels of oil and natural gas liquids and 227.9 billion cubic feet ("Bcf") of natural gas for a total of 491.1 Bcf equivalent of natural gas ("Bcfe"). The Company's proved reserves decreased 23% from total proved oil and natural gas reserves of 638.8 Bcfe as of December 31, 2007, primarily due to the impact of lower pricing for both oil and natural gas.

The 2008 proved reserves were determined by using prices of $37.71 per barrel for oil and natural gas liquids and $6.17 per Mcf for natural gas, which represent the December 31, 2008 market prices adjusted for the Company's average basis differentials, versus $87.22 per barrel for oil and natural gas liquids and $6.88 per million cubic feet ("Mcf") for natural gas at December 31, 2007.

As of December 31, 2008, oil and natural gas liquids accounted for 54% of the total proved reserves, and 68% of the total proved reserves were classified as proved developed. This compares to 48% and 62%, respectively, of proved reserves at December 31, 2007. The Company's estimate of proved reserves is based on a reserve report prepared by Netherland, Sewell & Associates, Inc., the Company's independent petroleum consultant.

Ceiling Test Impairment: The Company expects to take a non-cash impairment of approximately $1.2 billion (resulting in a charge to earnings of approximately $.8 billion after-tax) to the carrying value of the Company's proved oil and gas properties as of December 31, 2008. The charge results from the application of the full cost "ceiling test" under the full cost method of accounting. Under full cost accounting requirements, the carrying value of the Company's oil and gas properties is evaluated on a quarterly basis and is limited to the present value of expected future cash flows of proved reserves using a 10-percent discount rate based on prices and costs at the end of the quarter plus the cost of unevaluated oil and gas properties (i.e. the cost center ceiling). A ceiling test charge occurs when the carrying value of the oil and gas properties exceeds the cost center ceiling. The impairment is primarily attributable to lower prices for both oil and natural gas at December 31, 2008. The ceiling test impairment charge is a non-cash item that does not impact any of the covenants on the Company's debt obligations.

Tracy Krohn, Chairman and Chief Executive Officer, commented, "In 2008, we faced many challenges including two hurricanes in the Gulf of Mexico and severe commodity price swings that have forced us to recognize a significant non-cash ceiling test impairment as well as large negative revisions to our proved reserves, primarily due to lower pricing. This year, through the drill bit and the acquisition of Apache's interest in 'Mahogany', the proved reserves attributable thereto exceeded 110% of production in 2008."


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