Executive Summary

Q1 2025 revenue was $129.9M and GAAP diluted EPS was $(0.21); adjusted net loss was $(0.13) per share as non‑cash/unusual items (notably $15.0M debt extinguishment loss) weighed on GAAP, while Adjusted EBITDA was $32.2M (+2% q/q) and FCF was $10.5M . Versus S&P consensus, revenue and EPS were better than expected and EBITDA outperformed (see Estimates Context).*
Operations: production averaged 30.5 Mboe/d (52% liquids), near the high end of guidance; LOE of $71.0M came in below the low end of guidance as repair/maintenance and workover costs were lower than anticipated .
Outlook: management guided Q2 2025 volumes to 32.7–36.2 Mboe/d and maintained full‑year 2025 cost guidance; ramp is driven by West Delta 73 and Main Pass 108/98 coming back online in late March/early April .
Balance sheet/liquidity: January refinancing cut second‑lien coupon by 100 bps, reduced gross debt by ~$39M, eliminated near‑term amortization on the term loan, and left $155.9M of liquidity at 3/31 (cash $105.9M; undrawn $50M RCF); a $58.5M insurance settlement and $11.9M non‑core sale further bolstered cash; a $0.01 dividend was declared for Q2 .
Regulatory tailwind: DOI signaled it will not seek supplemental financial assurance in much of the Gulf; management called the development “very positive” for W&T’s costs and financing flexibility .

What Went Well and What Went Wrong

What Went Well

Production and costs: 30.5 Mboe/d near guidance high end; LOE of $71.0M below guidance low end on lower repair, facility and workover costs . CEO: “We reported production at the high end of our guidance range… and we recorded lease operating expenses below the low end of our guidance” .
Balance sheet actions: refinanced 11.75% notes and repaid $114.2M term loan; lowered coupon 100 bps, cut gross debt ~$39M; established a new undrawn $50M revolver; liquidity $155.9M at quarter‑end .
Asset ramp/hedging: West Delta 73 and Main Pass 108/98 were brought online late Q1/early Q2, with ramp expected through Q2; added 2025 Henry Hub costless collars (70,000 MMBtu/d Apr–Dec with $4.02/$5.32 floor/ceiling) to lock favorable gas pricing .

What Went Wrong

Weather/volumes: production fell vs Q4 2024 (30.5 vs 32.1 Mboe/d) and vs Q1 2024 (30.5 vs 35.1 Mboe/d) due to January freeze‑related shut‑ins; unit LOE rose to $25.88/boe on lower volumes .
Derivatives and one‑timers: $2.7M net derivative loss (realized losses), and a $15.0M loss on extinguishment of debt pressed GAAP earnings; Adjusted metrics strip these effects .
Legal/surety overhang: ongoing surety litigations with aggregate collateral demands of ~$254.7M across sureties (including a separate PIIC demand) remain a liquidity risk pending resolution .

Financial Results

P&L headline comparison (oldest → newest)

Metric	Q1 2024	Q4 2024	Q1 2025
Revenue ($M)	$140.8	$120.3	$129.9
Net Income (Loss) ($M)	$(11.5)	$(23.4)	$(30.6)
Diluted EPS ($)	$(0.08)	$(0.16)	$(0.21)

Non‑GAAP KPIs (company‑reported)

Metric	Q1 2024	Q4 2024	Q1 2025
Adjusted EBITDA ($M)	$49.4	$31.6	$32.2
Free Cash Flow ($M)	$32.4	$(10.2)	$10.5
Adjusted Net Loss ($M)	$(7.6)	$(26.2)	$(19.1)
Adjusted EPS ($)	$(0.05)	$(0.18)	$(0.13)

Operating KPIs and realized prices

KPI	Q1 2024	Q4 2024	Q1 2025
Sales volumes (MBoe)	3,199	2,953	2,744
Avg daily (Mboe/d)	35.1	32.1	30.5
Oil/NGL/Gas mix	1,400 MBbl / 343 MBbl / 8,733 MMcf	1,263 MBbl / 273 MBbl / 8,505 MMcf	1,230 MBbl / 200 MBbl / 7,884 MMcf
Realized oil ($/Bbl)	$76.44	$68.71	$71.31
Realized gas ($/Mcf)	$2.48	$2.85	$4.45
Realized NGL ($/Bbl)	$21.78	$24.59	$23.86
Realized Boe ($/Boe)	$42.55	$39.86	$46.50
LOE total ($M)	$70.8	$64.3	$71.0
LOE ($/Boe)	$22.14	$21.76	$25.88
G&T + taxes ($/Boe)	$2.36	$2.00	$2.06
DD&A ($/Boe)	$10.61	$12.94	$11.99

Guidance Changes

Metric	Period	Previous Guidance (3/3/25)	Current Guidance (5/6/25)	Change
Total equivalents (MBoe)	Q2 2025	—	2,977 – 3,295	New period
Avg daily (Mboe/d)	Q2 2025	—	32.7 – 36.2	New period
LOE ($M)	Q2 2025	—	71.3 – 78.9	New period
G&T + taxes ($M)	Q2 2025	—	6.6 – 7.4	New period
Cash G&A ($M)	Q2 2025	—	14.5 – 16.1	New period
DD&A ($/Boe)	FY 2025	13.40 – 14.90	13.40 – 14.90	Maintained
LOE ($M)	FY 2025	280.0 – 310.0	280.0 – 310.0	Maintained
G&T + taxes ($M)	FY 2025	27.1 – 30.1	27.1 – 30.1	Maintained
Cash G&A ($M)	FY 2025	62.0 – 69.0	62.0 – 69.0	Maintained
Avg daily (Mboe/d)	FY 2025	32.8 – 36.3	32.8 – 36.3	Maintained
Dividend ($/sh)	Q2 2025	—	$0.01 (declared)	Maintained program

Implications: Guidance underpins a sequential volume ramp in Q2 from asset restarts while keeping full‑year cost ranges intact, signaling confidence in integration and cost control .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q3’24, Q4’24)	Current Period (Q1’25)	Trend
Acquisition integration (Cox assets)	Several fields offline in 2024; working to return 2 fields; integration efforts and safety focus	West Delta 73 and Main Pass 108/98 placed into production late Mar/early Apr; ramp through Q2	Improving execution; production uplift underway
Capital allocation (drill vs buy)	Preference for accretive producing acquisitions; drilling in 2026, potentially deferred in 2025	Reiterated focus on low‑risk acquisitions given price volatility; no near‑term grassroots drilling	Consistent bias to acquisitions
Costs/LOE	Q3 LOE below guidance; 2025 LOE $280–$310M; refurbishment continues in 2025	Q1 LOE below guidance; expect per‑boe reductions with higher volumes; more synergy opportunities	Cost discipline sustained
Hedging/gas	Gas collars added for 2025; outlook constructive on gas	Expanded collars (70k MMBtu/d Apr–Dec); locked favorable range	Coverage increased
Regulatory/legal	Election/regulatory uncertainty; FA requirements and Rice’s whale rules concerns	DOI limits supplemental FA; “very positive” for W&T; expect lower FA costs	Regulatory backdrop improving
Shareholder returns	Ongoing dividend program	Sixth consecutive dividend paid; Q2 dividend declared	Program maintained

Management Commentary

“We have brought online the remaining two fields from the Cox acquisition, which we expect will meaningfully increase production for the remainder of 2025, as you can see from our second quarter and full year guidance.” — Tracy W. Krohn, CEO .
“We successfully closed the issuance of new 10.75% Notes… and added material cash through a non-core disposition and an insurance settlement… We have over $100 million in cash on our balance sheet and remain prepared to take advantage of potential acquisitions.” — CEO .
“We delivered production of 30,500 barrels of oil equivalent per day near the top end of our guidance… lease operating expenses came in below the low end of guidance at $71 million… We also produced $10.5 million in free cash flow.” — CEO, prepared remarks .
On financial assurance: “This is a very positive development for W&T… we’re looking for a pretty dramatic reduction in those FA costs… that should be a positive for [credit facilities] as well.” — CEO, Q&A .

Q&A Highlights

Strategy: Management confirmed a continued preference for accretive producing acquisitions over grassroots drilling in the current price/volatility environment; drilling remains possible later but not a near‑term focus .
Regulatory impact: DOI’s April 8 FA guidance expected to lower financial assurance costs; W&T currently has no sole liability properties, implying limited FA exposure under the new approach .
Production cadence: Ramp from West Delta 73 and Main Pass 108/98 plus planned workovers/acidizing expected to lift volumes into Q3/Q4 2025 .
Portfolio pruning: The team sees further potential to monetize non‑core royalty interests following the Garden Banks sale at attractive metrics .

Estimates Context

Metric	S&P Global Consensus	Actual	Surprise
Revenue ($M)	123.9*	129.9	+$6.0M
Primary EPS ($)	(0.15)*	(0.13)	+$0.02
EBITDA ($M)	21.5*	32.2 Adjusted EBITDA	+$10.7M

Notes: Estimates are S&P Global consensus; company reports Adjusted EBITDA as its non‑GAAP KPI, which outperformed. Values retrieved from S&P Global.*

Why: Beat driven by stronger realized prices (Boe up to $46.50 from $39.86 in Q4) despite lower volumes; LOE below guidance helped Adjusted EBITDA; GAAP EPS was pressured by a $15.0M debt extinguishment charge .

Key Takeaways for Investors

Near‑term volume catalyst: The restart and ramp of West Delta 73 and Main Pass 108/98 support a sequential Q2 step‑up (32.7–36.2 Mboe/d) with maintained full‑year ranges, improving operating leverage as unit costs decline with higher throughput .
Cost discipline intact: Q1 LOE undershot guidance; management targets further per‑boe reductions as volumes rise and integration synergies accrue .
Balance sheet risk reduced: January refinancing lowered coupon and removed amortization; liquidity stands at ~$156M with an undrawn $50M revolver, enhancing flexibility for opportunistic acquisitions .
Regulatory tailwind: DOI’s FA stance reduces a key uncertainty and potential cash burden across the Gulf, a positive for cost of capital and M&A executable capacity .
Litigation overhang persists: Surety litigation with aggregate collateral demands (~$255M) remains a watch item until mediation resolves; potential liquidity impact warrants monitoring alongside regulatory developments .
Commodity mix/prices: Higher gas realizations ($4.45/Mcf) and collars ($4.02/$5.32 Apr–Dec) solidify 2025 cash flows; oil remains the focus for incremental production growth .
Trading setup: The combination of Q2 volume ramp, cost control, regulatory relief, and balance‑sheet improvement offers multiple positive catalysts; key risks are commodity prices and litigation outcomes.

Citations

Q1 2025 press release and 8‑K exhibits, including financials, KPIs, guidance, and balance sheet .
Q1 2025 10‑Q details on derivatives, debt, credit facility, and legal proceedings .
Q1 2025 earnings call transcript for qualitative color and Q&A .
Prior quarter materials: Q4 2024 press release (for prior guidance and comps) and Q4/Q3 2024 earnings calls .

W&T OFFSHORE INC (WTI)·Q1 2025 Earnings Summary