W&T Offshore Says Five Platforms Damaged by Hurricane Rita

W&T Offshore reports initial assessment of the impact of Hurricane Rita on its operations in the Gulf of Mexico. As a result of Hurricane Rita, the Company temporarily shut-in all operated wells. While several platforms had some damage, only five operated platforms had significant physical damage, including East Cameron 338 A and Eugene Island 397 A. Net daily production associated with these platforms prior to the hurricane was 15 million cubic feet of natural gas equivalent (MMcfe). All other operated structures inspected by air or by physical inspection appear to be intact. The Company has already begun the repair process and is continuing the assessment of any sub-sea damages.

W&T's pre-Hurricane Katrina and Rita volumes were approximately 245 MMcfe net per day. Currently, the Company still estimates that 55 MMcfe per day additional net production is shut-in because of Hurricane Katrina. Net daily production of approximately 190 MMcfe was shut in because of Hurricane Rita. The Company is currently producing 24 MMcfe net per day. The buildup to pre-Hurricane Rita volumes is anticipated to be as follows:

24 MMcfe per day - Current production.

17 MMcfe per day - Expected production within the next seven days.


14 MMcfe per day - Expected to come online when assessments to 3rd party pipelines are completed.

12 MMcfe per day - Expected to come online after completing minor repairs in the field.

76 MMcfe per day - Expected to come online when on-shore processing plants are repaired.

15 MMcfe per day - Expected to come online after completing major repairs in the field (approximately 60 day or more).


8 MMcfe per day - Non-operated production expected to come on production in the near future according to the respective operators.

24 MMcfe per day - Non-operated production where the operator has not yet provided a timing estimate for returning to production.


190 MMcfe per day - Estimated Pre-Rita Production.

W&T is evaluating several alternative methods for bringing shut-in production online such as utilizing temporary infrastructure and other operator's platforms.

W&T maintains insurance coverage for property damage due to hurricanes and tropical storms. The policy has a cumulative deductible of $5 million. Currently, W&T estimates total repair cost due to both hurricanes to be approximately $35 million net for operated fields. The Company does not have an estimated cost for non-operated fields at this time. A dedicated team that will handle the repairs and insurance claims as a result of the hurricanes. The Company does not carry business interruption insurance.

The Company will provide additional information and guidance as to the impact from Hurricane Rita and Hurricane Katrina as it becomes aware of them.

Tracy W. Krohn, Chairman and Chief Executive Officer, stated, "In the last month, we have successfully evacuated all of our offshore and office personnel twice, due to Hurricanes Katrina and Rita. In spite of these disruptions, the staff remains focused on returning production to pre-hurricane levels. By my estimates, Hurricane Rita represents the most catastrophic storm ever in terms of impact on oil and gas operations in the Gulf of Mexico. The damage that was suffered by W&T appears to be in line with the reports of other significant operators in the Gulf of Mexico. However, I am very pleased with the pace of our repair operations. Currently, drilling and construction projects have been delayed only 10 days; however, no drilling rigs working for W&T were damaged because of the hurricane. Of the rigs reported to be severely damaged or lost by major rig operators, none will affect our 2005 or 2006 drilling program. Our operations are proceeding as planned."