W&T Offshore Briefs 2Q Results in 2011

W&T Offshore provided financial results for the second quarter 2011 and year-to-date operational results. Some of the highlights include:

  • Oil sales increased 3.3% or 48,000 barrels to 1.5 million barrels, natural gas sales volumes increased 7.5% or .9 Bcf to 13.2 Bcf and natural gas liquids volumes increased 49.6% or 139,300 barrels to 420,300 barrels, each when comparing second quarter of 2011 to the second quarter of 2010.
  • Averaged realized oil sales price increased $34.73 per barrel to $111.00 per barrel and our NGLs sales price increased $15.68 per barrel to $58.81 per barrel compared to the second quarter of 2010. Average natural gas sales prices were $4.45 per Mcf in the second quarter of 2011 compared to $4.47 per Mcf in the second quarter of 2010.
  • Mid-year estimated proved reserves increased by 41% to 686.1 Bcfe or 114.3 MMBoe. Oil and liquids now represent 60% of total proved reserves.
  • On May 11, 2011, we closed on the acquisition of 30 million barrels of oil equivalent of proved reserves on 21,900 gross acres in the West Texas Permian Basin, referred to herein as the Permian Basin Properties.
  • Adjusted EBITDA increased 93% to $175.6 million from the second quarter of 2010. Sequentially, adjusted EBITDA increased $42.3 million or 32%.
  • Net income for the second quarter of 2011 increased 98% to $55.2 million and earnings per share increased 97% to $.73 per share, compared to the second quarter of 2010. Excluding special items, net income was $53.4 million, or $0.71 per common share, up from $0.22 per common share, excluding special items, in the second quarter of 2010. Sequentially, net income, excluding special items, increased $20.7 million or 63% and earnings per share, excluding special items, increased $.28 per share or 65%.
  • Revenues increased 41% or $73.3 million, to $252.9 million from $179.7 million in the corresponding period of 2010. The increase in revenues is comprised of 81% higher prices and 19% higher production volumes. Sequentially, revenues increased $42.1 million or 20%.
  • Closed on a private offering of $600 million of 8.5% Senior Notes due 2019.
  • Entered into a new four-year revolving bank credit facility. The size of the revolver is $487.5 million following the Senior Notes offering, increasing to $537.5 million upon closing of the fourth Shell property expected in August 2011.
  • During the first half of 2011, we participated in the drilling of ten onshore wells and three offshore wells, all of which were successful. One onshore well was an exploration well in south Texas and the other nine onshore wells were development wells on the Permian Basin Properties. All of the offshore wells were on the conventional shelf with one being an exploration well and the other two being development wells.

Tracy W. Krohn, Chairman and Chief Executive Officer, commented, "We had another great quarter both financially and operationally as we began the next growth phase of the company. We expanded meaningfully onshore into the Permian Basin via a significant acquisition, improved our liquidity position by successfully refinancing our senior notes, and entered into a new four-year revolving bank credit facility with a larger borrowing base. The acquisition of the Permian Basin Properties, which is 91% oil and liquids, helps our reserve profile by increasing our reserve life, increasing the ratio of oil and natural gas liquids to total proved reserves and providing substantial long-term growth with more predictable, repeatable drilling opportunities. We increased production in a rising crude oil price environment allowing for strong earnings and cash flow."