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W&T OFFSHORE INC (WTI)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 revenue was $120.3M, diluted EPS was $(0.16), and Adjusted EBITDA was $31.6M; production was 32.1 MBoe/d and within guidance despite hurricane-related and third‑party downtime .
  • Lease operating expense (“LOE”) materially beat guidance: $64.3M vs prior guidance of $73.0–$81.0M, driven by synergies, favorable audit adjustments, royalty credits, and lower repairs/maintenance; realized price per Boe declined to $39.86 .
  • 2025 outlook introduced: Q1 2025 production 27.6–30.6 MBoe/d (maintenance/freeze downtime) and FY 2025 32.8–36.3 MBoe/d with Cox fields returning; LOE guided higher near 2024 levels (Q1: $72.5–$80.5M; FY: $280–$310M) .
  • Balance sheet strengthened post-quarter: $350M 10.75% notes due 2029, term loan repaid, gross debt reduced by ~$39M, and $58.5M insurance settlement; dividend maintained at $0.01/share .

What Went Well and What Went Wrong

What Went Well

  • LOE executed well below guidance at $64.3M (12% below the low end), reflecting acquisition synergies and favorable items; LOE per Boe fell Q/Q to $21.76 .
  • Proved reserves increased to 127.0 MMBoe at year‑end; PV‑10 rose 14% to $1.2B despite lower SEC pricing (“oil reserves +39%” YoY) .
  • Management emphasized sustained free cash flow strategy and accretive acquisitions, with Q4 Adjusted EBITDA of $31.6M and five consecutive quarterly dividends since inception .
  • Quote: “We delivered solid results in 2024 thanks to our continued commitment to executing on our strategic vision focused on free cash flow generation, maintaining solid production and maximizing margins.” — Tracy W. Krohn .

What Went Wrong

  • Net loss of $(23.4)M in Q4 and revenue down ~9% YoY on lower realized prices and volumes; realized price per Boe dropped to $39.86 .
  • Derivative result turned to a net loss of $2.1M in Q4 (realized losses $2.6M, small unrealized gain) versus gains in Q3 and Q4 2023 .
  • Q1 2025 production guide reflects planned maintenance and unplanned winter freeze downtime; LOE expected higher Q/Q in Q1 due to facility upgrades .

Financial Results

Income Statement Summary

MetricQ4 2023Q3 2024Q4 2024
Total Revenues ($USD Millions)$132.3 $121.4 $120.3
Net (Loss) Income ($USD Millions)$(0.4) $(36.9) $(23.4)
Diluted EPS ($USD)— $(0.25) $(0.16)

Revenue by Product

Revenue Component ($USD Millions)Q4 2023Q3 2024Q4 2024
Oil$94.1 $90.9 $86.8
NGLs$6.9 $5.6 $6.7
Natural Gas$29.4 $23.1 $24.2
Other$2.0 $1.7 $2.7
Total$132.3 $121.4 $120.3

Operating KPIs and Unit Economics

KPIQ2 2024Q3 2024Q4 2024
Net Sales Volumes (MBoe)3,177 2,854 2,953
Avg Daily Equivalents (MBoe/d)34.9 31.0 32.1
Mix: Oil (%)44% 43% 43%
Realized Price per Boe ($/Boe)$44.40 $41.92 $39.86
LOE ($MM)$74.0 $72.4 $64.3
LOE ($/Boe)$23.29 $25.37 $21.76
G&T and Production Taxes ($/Boe)$2.70 $2.15 $2.00
DD&A ($/Boe)$11.55 $11.99 $12.94
G&A ($/Boe)$6.72 $6.91 $7.04
Adjusted EBITDA ($MM)$45.9 $26.7 $31.6

Guidance vs Actual (Q4 2024)

MetricQ4 2024 Guidance (from Q3 release)Q4 2024 ActualOutcome
Total Equivalents (MBoe)2,927–3,253 2,953 In range
Avg Daily Equivalents (MBoe/d)31.8–35.4 32.1 In range
LOE ($MM)73.0–81.0 64.3 Beat guidance
G&T & Production Taxes ($MM)6.8–7.6 5.9 Beat guidance
DD&A ($/Boe)13.00–14.00 12.94 Slightly below guide

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Oil (MBbl)Q1 2025—1,130–1,250 New
NGLs (MBbl)Q1 2025—205–235 New
Nat Gas (MMcf)Q1 2025—7,220–7,980 New
Total Equivalents (MBoe)Q1 2025—2,538–2,815 New
Avg Daily Equivalents (MBoe/d)Q1 2025—27.6–30.6 New
LOE ($MM)Q1 2025—72.5–80.5 New (higher vs Q4 actual)
G&T & Production Taxes ($MM)Q1 2025—6.1–6.9 New
Cash G&A ($MM)Q1 2025—17.8–19.8 New
Non‑cash G&A ($MM)Q1 2025—2.1–2.5 New
Oil (MBbl)FY 2025—5,150–5,690 New
NGLs (MBbl)FY 2025—1,020–1,140 New
Nat Gas (MMcf)FY 2025—34,880–38,560 New
Total Equivalents (MBoe)FY 2025—11,983–13,257 New
Avg Daily Equivalents (MBoe/d)FY 2025—32.8–36.3 New
LOE ($MM)FY 2025—280.0–310.0 New (modestly higher vs 2024 actual)
G&T & Production Taxes ($MM)FY 2025—27.1–30.1 New
Non‑cash DD&A ($/Boe)FY 2025—13.40–14.90 New
TaxesFY 2025—Substantially all deferred New
DividendQ1 2025—$0.01/share declared Maintained

Earnings Call Themes & Trends

TopicQ2 2024 (Prev Mentions)Q3 2024 (Prev Mentions)Q4 2024 (Current Period)Trend
Cox acquisition integration4 of 6 fields online; re‑routing Mobile Bay volumes; LOE below guidance 2 fields still shut‑in; production impacted by hurricanes; LOE below guidance Remaining fields (Main Pass 108/98, West Delta 73) expected back online in Q2 2025 Progressing; production uplift expected in 1H25
Capex vs acquisitionsFocus on accretive acquisitions, low drill activity Continued emphasis on acquisitions Preference to substitute acquisitions for drilling; 2025 capex $34–$42M Acquisition‑led strategy sustained
LOE cost controlLOE $74.0M; per Boe $23.29 LOE $72.4M; per Boe $25.37 LOE $64.3M; per Boe $21.76; beat guidance Improving vs guidance
HedgingDerivative loss Q2; mix adjusted Derivative gain $3.2M Added costless collars for 50,000 MMBtu/d (floor $3.88, ceiling $5.125) Mar–Dec 2025 Natural gas price risk managed
Macro/operational downtimeMobile Bay third‑party turnaround constrained Q2 Hurricanes and third‑party downtime (3.5 MBoe/d impact) Winter freezes and maintenance weigh on Q1 2025 volumes Weather/third‑party remains a near‑term headwind
Regulatory/legalCox bankruptcy pipeline issues in guidance commentary Non‑ARO P&A accrual increase Non‑ARO accrual decreased $2.8M in Q4 Liability accrual easing
Balance sheetLiquidity $173.4M, net debt $268.5M Liquidity $176.5M, net debt $266.0M Refinanced notes, repaid term loan, pro forma net debt ~$245.2M; insurance settlement $58.5M Strengthening leverage/liquidity

Management Commentary

  • “We delivered solid results in 2024 thanks to our continued commitment to executing on our strategic vision focused on free cash flow generation, maintaining solid production and maximizing margins.” — Tracy W. Krohn, CEO .
  • “We strengthened our balance sheet by closing the new 10.75% Notes…oversubscribed…received improved credit ratings from S&P and Moody’s.” — Tracy W. Krohn .
  • “Our full year 2025 production midpoint is about 34,000 BOE/d…additional fields coming online from the Cox acquisitions will help us offset natural decline and grow production this year.” — Tracy W. Krohn .

Q&A Highlights

  • 2025 plan leans toward acquisitions over new drilling; Magnolia (“Holy Grail”) and a Cayman prospect remain in the queue, potentially deferred by acquisitions .
  • Operating cost outlook: significant refurbishment progress on Cox platforms in 2024; more to complete in 2025, underpinning LOE guide of $280–$310M .
  • Field restarts: Main Pass assets awaiting bankruptcy‑related resolution; West Delta 73 mainly maintenance — majority of work completed, restart expected Q2 2025 .

Estimates Context

  • Wall Street consensus (S&P Global) for Q4 2024 EPS and revenue was not available at time of analysis due to provider limits; therefore, estimate comparisons could not be made reliably. Values retrieved from S&P Global were unavailable.

Key Takeaways for Investors

  • Operational execution beat cost guidance: LOE and G&T taxes came in below guidance, supporting Q4 Adjusted EBITDA despite softer realized pricing — a positive quality-of-earnings signal .
  • 2025 production guide embeds near‑term maintenance/freezes in Q1 but anticipates uplift in Q2 from Cox fields returning; tracking restart timing is key to the H1/H2 cadence .
  • Balance sheet actions reduce interest cost and extend maturities; pro forma net leverage improved, increasing strategic flexibility for acquisition‑led growth .
  • Reserve and PV‑10 expansion (oil‑weighted) despite lower SEC pricing underscores asset quality and supports acquisition‑integration thesis durability .
  • Natural gas collars (Mar–Dec 2025) mitigate downside while preserving upside, aligning with management’s constructive gas view .
  • Watch non‑ARO P&A accrual trends and LOE trajectory as refurbishment winds down; cost discipline is a durable catalyst given unit cost improvements .
  • Dividend continuity ($0.01/share) signals confidence in cash generation; consider sustainability versus capex and acquisition pipeline .