Live Earnings Conference Call: W&T Offshore will host a live Q1 2025 earnings call on May 7, 2025 at 12:00PM ET. Follow this link to get details and listen to W&T Offshore's Q1 2025 earnings call when it goes live. Get details. NYSE:WTI W&T Offshore Q3 2023 Earnings Report $1.16 +0.01 (+0.87%) Closing price 05/6/2025 03:59 PM EasternExtended Trading$1.18 +0.02 (+1.29%) As of 05/6/2025 07:53 PM Eastern Extended trading is trading that happens on electronic markets outside of regular trading hours. This is a fair market value extended hours price provided by Polygon.io. Learn more. Earnings History W&T Offshore EPS ResultsActual EPS$0.01Consensus EPS $0.04Beat/MissMissed by -$0.03One Year Ago EPS$0.33W&T Offshore Revenue ResultsActual Revenue$142.40 millionExpected Revenue$138.85 millionBeat/MissBeat by +$3.55 millionYoY Revenue Growth-46.60%W&T Offshore Announcement DetailsQuarterQ3 2023Date11/7/2023TimeAfter Market ClosesConference Call DateWednesday, November 8, 2023Conference Call Time10:00AM ETConference Call ResourcesConference Call AudioConference Call TranscriptPress Release (8-K)Quarterly Report (10-Q)Earnings HistoryCompany ProfilePowered by W&T Offshore Q3 2023 Earnings Call TranscriptProvided by QuartrNovember 8, 2023 ShareLink copied to clipboard.There are 6 speakers on the call. Operator00:00:00Ladies and gentlemen, thank you for standing by. Welcome to the W and T Offshore Third Quarter 2023 Conference Call. During today's call, all parties will be in a listen only mode. Following the company's prepared comments, the Call will be opened for questions and answers. You can always rejoin the queue. Operator00:00:29This conference is being recorded and a replay will be made available on the company's website following the call. I would now like to turn the conference over to Al Petrie, Investor Relations Coordinator. Please go ahead. Speaker 100:00:44Thank you, Sarah. And on behalf of the management team, I'd like to welcome all of you to today's conference call to review W and T Offshore's 3rd quarter 2023 financial and operational results. Before we begin, I would like to remind you that our comments may include forward looking statements. It should be noted that a variety of factors could cause W and T's actual results to differ materially from the anticipated results or expectations expressed in these forward looking statements. Today's call may also contain certain non GAAP financial measurements. Speaker 100:01:19Please refer to the earnings release that we issued yesterday for disclosures on forward looking statements and reconciliations of non GAAP financial measures. With that, I would like to turn the call over to Tracy Krone, our Chairman and CEO. Speaker 200:01:33Thanks, Al. Good day, everyone, and thanks for joining us this morning. With me today are William Willeford, our Executive VP and Chief Operating Officer Sameer Parasnes, our Executive VP and Chief Financial Officer and Trey Hartman, our Chief Accounting Officer. They're all available to answer questions later during the call. But before I get into the operational and financial results, I would like to begin by reviewing our long standing and successful strategic rationale. Speaker 200:02:03Our strategy has always been simple, generate free cash flow, maintain high quality conventional production and opportunistically capitalize on accretive opportunities to build We've delivered 23 consecutive quarters of free cash flow because we prioritize cash flow through our operational and cost controlling initiatives. We have a prolific asset base that delivers strong production and generates meaningful EBITDA. We have generated positive free cash flow every quarter since the beginning of 2018. And in Q3 2020 We delivered over $25,000,000 in free cash flow. So by prioritizing cash flow, we built a strong balance sheet with ample cash to navigate our cyclical business, Opportunistically acquire complementary assets and now be able to pay a quarterly cash dividend on our common stock. Speaker 200:02:55Our Board this week adopted a program to report to return a portion of our strong cash flow that we generate each quarter directly to our shareholders To enhance the return on their investment, our first dividend of $0.01 per share will be paid on December 22 to shareholders of record on November 28, 2023. So we began 2023 by making a decision with regard to how we were going to manage our debt going forward. We had the ability to pay it all off, but we know that in times of uncertainty, maintaining liquidity is extremely important. So we redeemed all of our existing second lien notes in the amount of $552,000,000 and did a new issuance of $275,000,000 due in 2026, thus significantly reducing our debt and interest payments going forward, while also strengthening our balance sheet. We have a low leverage profile of 1.2 times net debt to trailing months adjusted EBITDA, which coupled with the significant cash we have on hand, provides us with financial flexibility to act quickly should we see the right acquisition opportunity arise. Speaker 200:04:05Over the years, we've created significant value by seamlessly integrating producing property acquisitions, while maintaining strong operational excellence. In the Q3, we were pleased to complete another acquisition. In late September, we finalized the purchase of 8 shallow water producing properties for $28,900,000 net of purchase price adjustments that immediately added free cash flow to W and T after the closing date, while increasing our production reserves. These properties are in our existing areas of operation in the Central and Eastern Gulf of Mexico and met our acquisition criteria of generating free cash flow, a solid base of proved reserves with upside potential and the ability to reduce costs. We funded the acquisition with cash on hand and still ended the quarter with nearly $150,000,000 of cash. Speaker 200:04:53We have the experience and expertise Now we believe that we are very well positioned to continue to make acquisitions, but we also feel that patience is important as we look for strategic value and free cash flow generation potential in all acquisition opportunities that we are continuously evaluating. So we can make acquisitions that add value and we believe that there are numerous opportunities arising that will allow us to continue with that strategy. Now turning to our outstanding 3rd quarter results, I'd like to point out some key highlights and accomplishments. We reported net income of $2,100,000 or $0.01 per diluted share in the Q3 of 2023 compared to a net loss of $12,100,000 in the Q2 of 2023. We increased adjusted EBITDA by 45% quarter over quarter to $56,300,000 These increases were primarily driven by our ability to maintain production levels with highly economic workovers and cash flow associated with probable reserves that are not currently booked as proven reserves. Speaker 200:06:10We also benefited in the quarter from increased realized oil and natural gas pricing. These factors helped us generate $25,100,000 of free cash flow, our 23rd consecutive quarter of free cash flow. So we adhere to our strategy to achieve sustainable and consistent results. I believe that our continued success is driven by the ability of both our operations and finance teams to execute at a high level and our outstanding asset base in the Gulf of Mexico. Our ability to pay down debt and improve our balance sheet has put us in a favorable position today, and we remain focused on operational execution in 'twenty three and beyond to continue building on our already outstanding results. Speaker 200:06:57So in Q3 of 2023, we reported strong production of nearly 36,000 barrels oil equivalent per day. Our production was above the midpoint of guidance with 1,230,000 barrels of oil, 348,000 barrels of NGLs and 10.4 Bcf of natural gas for the quarter. We focused on acquisitions over the last few years rather than on drilling many new wells. For the Q4 of 2023, we expect production to be in the range of $34,000 $38,000 barrels of oil equivalent per day. This reflects the benefit of the acquisition we closed in late September that has helped mitigate the low natural production decline of our asset base compared with much higher declines in unconventional onshore reservoirs. Speaker 200:07:43We saw the benefit of 6 workovers during the 3rd quarter and will continue to focus on High returning work over and recompletions to help mitigate production decline going forward. On the cost side, While we continue to see inflationary pressures in the industry, our 3rd quarter results were very encouraging as we lowered our lease operating expense on an absolute basis and on a per share basis quarter over quarter. Our per barrel equivalent LOE declined from $19.60 in Q2 2023 to $18.72 in Q3 2023. We remain focused on cost control And margin expansion despite the current inflationary environment. For the Q4, our guidance for lease operating expense is expected to be between $60,500,000 $67,000,000 So we also continue to control our G and A cost In the Q3, we reported cash G and A of $16,700,000 which was within our guidance range. Speaker 200:08:45For the Q4, we expect cash G and A to be During 2023, we've reduced total debt by almost $300,000,000 from year end 2022. Speaker 300:09:04At the Speaker 200:09:04end of the Q3, we had net debt of $248,200,000 which was total debt of over of $397,200,000 net of cash and cash equivalents of $149,000,000 So as I mentioned Previously, the large reduction in total debt was driven by issuing new 2026 senior secured lien notes in January 2023. Those were issued at par totaling $275,000,000 in a private offering and using the proceeds along with a portion of our considerable cash position to retire all of our outstanding 2023 senior second lien notes. We continue to have the flexibility in dry powder to make additional acquisitions, continue to build cash and all the while further paying down debt. Now in quarter 3, 2023, we spent $8,000,000 in CapEx and have invested $31,000,000 for the 1st 9 months of this year. As I mentioned in our Q2 call, we lowered our CapEx range for 2023 by about $40,000,000 to be in a range of $50,000,000 $70,000,000 Included in this range are planned expenditures related to long lead drilling related items, capital costs for facilities, leasehold, seismic and recompletions. Speaker 200:10:23We expect to continue generating meaningful free cash flow, which provides us flexibility to execute on accretive opportunities very quickly. So as we look to next year, we plan to begin drilling again. We'll provide additional details on our 2024 capital investment plan during our year end call in early March. In the meantime, we plan to spud our Deepwater Holy Grail prospect at Magnolia in the Q1 of 2024. We have the rig under contract and expect the well to take around 6 to 8 months to drill and complete. Speaker 200:10:56It will be drilled off the Magnolia platform, which will allow the well to be We identified this proved undeveloped opportunity after we acquired Magnolia in December 2019. We believe it's a low risk opportunity with large production potential for us since we are the sole leaseholder. We are hoping to further advance our outstanding results through the recent acquisition of significant depth and breadth to our Leadership team. Over the past several months, we've appointed or promoted several members to our leadership team that I believe will be great additions and help maintain W and T's successful efforts into the future. So as I mentioned on the last call in early July, we appointed Sameer Parasnes This is our new Chief Financial Officer and welcomed him to our senior leadership team. Speaker 200:11:49In early September, we promoted Ford Peters to Vice President of Land. In early October, we appointed John Poole as our new Vice President of HSE and R. John's experience will be particularly important toward enhancing our commitment to sustainability. So before I close the call, I'd like to tell you about our 2022 ESG report that we issued in mid August. W and T's culture of success and sustainability is built on environmental stewardship, sound corporate governance and contributing positively to our employees and the communities where we work and operate. Speaker 200:12:27Ongoing commitment to ESG includes making a concerted effort and reaching out to our major shareholders for feedback and addressing their concerns while continuously improving our ESG metrics and transparency. To assist with development, implementation and monitoring of ESG initiatives and policies, we've established an ESG committee with our newest board member, Doctor. Nancy Chang, As the Chair of the Committee, we believe that Doctor. Chang will help guide our continuous improvement and assist us in our commitment So since our inaugural 2019 report, we've seen our total Scope 1 GHG emissions decreased by 20%. Our onshore facility air We're also reaching out to our shareholders to elicit feedback on stay on pay, Performance alignment and ESG initiatives. Speaker 200:13:37In 2023, we've enacted additional substantive changes to compensation programs Based on this feedback, we plan to continue to engage with our major shareholders to ensure alignment. So in closing, we're very pleased with how well we performed thus far in 2023, both operationally and financially. I'd like to thank our team at W and T as I believe we're well positioned for continued success in the future. Our strong financial position provides us with optionality and flexibility moving forward. Our liquidity and cash position Enables us to continue to evaluate growth opportunities, both organically and inorganically. Speaker 200:14:16And we're poised to Executing on accretive opportunities that meet our long standing improving criteria. We believe the Gulf of Mexico is and will continue to be World class basin with strong producing assets. Quickly evaluating and executing on opportunities within our focus area is a pillar of our success. We have a premier portfolio of both shallow water and deepwater properties in the Gulf of Mexico that have low decline rates And significant upside. Our management team's interests are highly aligned with those of our shareholders, given our 34% stake in W and D's equity, which is one of the highest of any public E and P company. Speaker 200:14:59We welcome the positive mood and improved outlook for our industry. I believe W and T will continue to build value for shareholders as we execute our strategy. We're happy to be returning value again to shareholders in cash. With that, operator, we can open the lines for questions. Operator00:15:18Thank you. We will now begin the question and answer session. Our first question comes from Nate Pendleton with Stifel. Please go ahead. Speaker 400:15:50Good morning, all. Congrats on another strong quarter and the new dividend. Speaker 200:15:55Thanks, Nate. Speaker 400:15:57My first question, With your continued success in the M and A market, I wanted to get your thoughts on the opportunity set and the size of the packages you are seeing on the market today? Speaker 200:16:08The opportunity set is always good. It's a matter of pricing and timing As the price of oil and natural gas float up and down, it makes it difficult for people to make decisions about How they want to move forward. We recognize that. We're patient. We just we adhere to the principles that we've established over time. Speaker 200:16:33And that carries us through and but it does require some patience. I think that the company is well positioned Going forward to either make acquisitions or drill. And we'll have a little bit more on that later on in the year. Speaker 400:16:54Thanks. And given your ability to optimize production and use workovers to mitigate decline rates in the quarter, Can you provide us any details on what you are able to do from an optimization perspective and how much more running room you have for further initiatives? Speaker 500:17:10Yes. This is William Williford. I'll answer that. Essentially, we kind of base it on Projects that we can think we can turn cash flow around pretty quickly and get good production associated with it. That's why you can see us Just from a strong cash flow position, you'll see a lot of expenses going out versus the cash we have going in. Speaker 500:17:31We kind of plan it out accordingly. So that's kind of how we So we can be efficiently spend our cash effectively. Speaker 400:17:41Got it. Thanks for taking my questions. Operator00:17:46Our next question comes from Jeff Robertson with Water Tower Research. Please go ahead. Speaker 300:17:51Thank you. Good morning. Tracy, can you provide any update on the Cox situation and the acquisition that you all talked about that I think is just tied up in court? Speaker 200:18:03Yes. Good morning, Jeff. Yes, that's a very good question. The bankruptcy process is a Particularly difficult one. There's a lot of emotion. Speaker 200:18:15There's a lot of debts that haven't been paid. Otherwise, they wouldn't be there. So the process is at best variable as to how it proceeds. We were the high bidder at the auction. And Since then and we'd actually gotten to the point where we signed a PSA with the debtor. Speaker 200:18:49However, there are other interests that weren't interested in it because it didn't relay a Particularly good return to them. But it's really a hard situation for everyone. Nobody's happy. Everybody's Usually, in a position where they're losing money and nobody likes to lose, I think it just will require more patience. I can't tell you that I fully understand the process. Speaker 200:19:19I'm not sure if anyone fully understands the process. We've been in this Position before looking for properties through bankruptcy courts. It's a difficult Situation for all and the best thing to do is just be patient and see what develops because There's going to be changes all along the way. So I think it's going to take a little while longer to sort it out. We don't know 100% if this is something that will happen favorably toward us or how it will end up In the next several weeks. Speaker 300:20:02Tracy, the acquisition that you did close in the 3rd quarter. Can you talk about what impact, if any, that has on W and T's overall corporate decline? Speaker 500:20:16Yes. Essentially, if you looked at the press release we put out there, I think we said it was around 2,400 Barrels associated with quarter north once we had it at full production. I think when we first got the asset Under our roof, we actually kind of look at it and see what we can do. As far as efficient things that we get more efficient, optimize production and that sort of thing, sometimes we We got to look at some of the facilities and do some spend some costs there to kind of look at the future And maintaining production over time. And with that increase, that kind of helps maintain our overall decline for the company. Speaker 200:20:57I'll add to that just a little bit, Jeff, in that very often when we first make these acquisitions, The seller isn't spending a lot of money on maintenance and the other things that they would normally spend money on. Speaker 300:21:15Lastly, Tracy, are you willing to share an AFE for Holy Grail? Speaker 200:21:21Well, I don't think I have those total dollar amounts yet. We're still working on some of the longer lead items that We need to resolve the rig will be coming from the bank to get offshore. So I'll probably be able to give you a little more clarity on that in after the 1st of the year. Speaker 300:21:43Thanks. And to be clear, the longer lead items Some of the items that would allow you to tie this in pretty quickly, right? Speaker 200:21:50Yes. Thank you. Thank you, sir. Operator00:22:08Showing no further questions, I would like Speaker 300:22:10to turn the conference back over to Tracy Krant for any closing remarks. Speaker 200:22:16Thank you, operator. Thanks for joining us this quarter. We're happy that we're on a really good track For this year and also very happy to be returning dividends again to shareholders. So we look forward to that for a long time. And we appreciate your attendance and we'll talk to you very soon. Speaker 200:22:37Thank you. Operator00:22:40The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.Read morePowered by Conference Call Audio Live Call not available Earnings Conference CallW&T Offshore Q3 202300:00 / 00:00Speed:1x1.25x1.5x2x Earnings DocumentsPress Release(8-K)Quarterly report(10-Q) W&T Offshore Earnings HeadlinesW&T Offshore Announces First Quarter 2025 Results and Declares Dividend for Second Quarter ...May 6 at 5:47 PM | gurufocus.comW&T Offshore Announces First Quarter 2025 Results and Declares Dividend for Second Quarter ...May 6 at 5:47 PM | gurufocus.comBlackrock’s Sending THIS Crypto Higher on PurposeWhile everyone's distracted by Bitcoin's moves, a stealth revolution is underway. One altcoin is quietly positioning itself to overthrow the entire banking system.May 7, 2025 | Crypto 101 Media (Ad)W&T Offshore Inc Q1 2025 Earnings: Revenue Surpasses Estimates at $129. ...May 6 at 5:47 PM | gurufocus.comW&T Offshore, Inc. Reports Q1 2025 Financial Results and Declares $0.01 DividendMay 6 at 4:56 PM | quiverquant.comW&T Offshore Announces First Quarter 2025 Results and Declares Dividend for Second Quarter of 2025May 6 at 4:45 PM | globenewswire.comSee More W&T Offshore Headlines Get Earnings Announcements in your inboxWant to stay updated on the latest earnings announcements and upcoming reports for companies like W&T Offshore? Sign up for Earnings360's daily newsletter to receive timely earnings updates on W&T Offshore and other key companies, straight to your email. Email Address About W&T OffshoreW&T Offshore (NYSE:WTI) engages in the production, exploration, development, and acquisition of oil and natural gas properties. It focuses its operations in the Gulf of Mexico. The company was founded by Tracy W. 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There are 6 speakers on the call. Operator00:00:00Ladies and gentlemen, thank you for standing by. Welcome to the W and T Offshore Third Quarter 2023 Conference Call. During today's call, all parties will be in a listen only mode. Following the company's prepared comments, the Call will be opened for questions and answers. You can always rejoin the queue. Operator00:00:29This conference is being recorded and a replay will be made available on the company's website following the call. I would now like to turn the conference over to Al Petrie, Investor Relations Coordinator. Please go ahead. Speaker 100:00:44Thank you, Sarah. And on behalf of the management team, I'd like to welcome all of you to today's conference call to review W and T Offshore's 3rd quarter 2023 financial and operational results. Before we begin, I would like to remind you that our comments may include forward looking statements. It should be noted that a variety of factors could cause W and T's actual results to differ materially from the anticipated results or expectations expressed in these forward looking statements. Today's call may also contain certain non GAAP financial measurements. Speaker 100:01:19Please refer to the earnings release that we issued yesterday for disclosures on forward looking statements and reconciliations of non GAAP financial measures. With that, I would like to turn the call over to Tracy Krone, our Chairman and CEO. Speaker 200:01:33Thanks, Al. Good day, everyone, and thanks for joining us this morning. With me today are William Willeford, our Executive VP and Chief Operating Officer Sameer Parasnes, our Executive VP and Chief Financial Officer and Trey Hartman, our Chief Accounting Officer. They're all available to answer questions later during the call. But before I get into the operational and financial results, I would like to begin by reviewing our long standing and successful strategic rationale. Speaker 200:02:03Our strategy has always been simple, generate free cash flow, maintain high quality conventional production and opportunistically capitalize on accretive opportunities to build We've delivered 23 consecutive quarters of free cash flow because we prioritize cash flow through our operational and cost controlling initiatives. We have a prolific asset base that delivers strong production and generates meaningful EBITDA. We have generated positive free cash flow every quarter since the beginning of 2018. And in Q3 2020 We delivered over $25,000,000 in free cash flow. So by prioritizing cash flow, we built a strong balance sheet with ample cash to navigate our cyclical business, Opportunistically acquire complementary assets and now be able to pay a quarterly cash dividend on our common stock. Speaker 200:02:55Our Board this week adopted a program to report to return a portion of our strong cash flow that we generate each quarter directly to our shareholders To enhance the return on their investment, our first dividend of $0.01 per share will be paid on December 22 to shareholders of record on November 28, 2023. So we began 2023 by making a decision with regard to how we were going to manage our debt going forward. We had the ability to pay it all off, but we know that in times of uncertainty, maintaining liquidity is extremely important. So we redeemed all of our existing second lien notes in the amount of $552,000,000 and did a new issuance of $275,000,000 due in 2026, thus significantly reducing our debt and interest payments going forward, while also strengthening our balance sheet. We have a low leverage profile of 1.2 times net debt to trailing months adjusted EBITDA, which coupled with the significant cash we have on hand, provides us with financial flexibility to act quickly should we see the right acquisition opportunity arise. Speaker 200:04:05Over the years, we've created significant value by seamlessly integrating producing property acquisitions, while maintaining strong operational excellence. In the Q3, we were pleased to complete another acquisition. In late September, we finalized the purchase of 8 shallow water producing properties for $28,900,000 net of purchase price adjustments that immediately added free cash flow to W and T after the closing date, while increasing our production reserves. These properties are in our existing areas of operation in the Central and Eastern Gulf of Mexico and met our acquisition criteria of generating free cash flow, a solid base of proved reserves with upside potential and the ability to reduce costs. We funded the acquisition with cash on hand and still ended the quarter with nearly $150,000,000 of cash. Speaker 200:04:53We have the experience and expertise Now we believe that we are very well positioned to continue to make acquisitions, but we also feel that patience is important as we look for strategic value and free cash flow generation potential in all acquisition opportunities that we are continuously evaluating. So we can make acquisitions that add value and we believe that there are numerous opportunities arising that will allow us to continue with that strategy. Now turning to our outstanding 3rd quarter results, I'd like to point out some key highlights and accomplishments. We reported net income of $2,100,000 or $0.01 per diluted share in the Q3 of 2023 compared to a net loss of $12,100,000 in the Q2 of 2023. We increased adjusted EBITDA by 45% quarter over quarter to $56,300,000 These increases were primarily driven by our ability to maintain production levels with highly economic workovers and cash flow associated with probable reserves that are not currently booked as proven reserves. Speaker 200:06:10We also benefited in the quarter from increased realized oil and natural gas pricing. These factors helped us generate $25,100,000 of free cash flow, our 23rd consecutive quarter of free cash flow. So we adhere to our strategy to achieve sustainable and consistent results. I believe that our continued success is driven by the ability of both our operations and finance teams to execute at a high level and our outstanding asset base in the Gulf of Mexico. Our ability to pay down debt and improve our balance sheet has put us in a favorable position today, and we remain focused on operational execution in 'twenty three and beyond to continue building on our already outstanding results. Speaker 200:06:57So in Q3 of 2023, we reported strong production of nearly 36,000 barrels oil equivalent per day. Our production was above the midpoint of guidance with 1,230,000 barrels of oil, 348,000 barrels of NGLs and 10.4 Bcf of natural gas for the quarter. We focused on acquisitions over the last few years rather than on drilling many new wells. For the Q4 of 2023, we expect production to be in the range of $34,000 $38,000 barrels of oil equivalent per day. This reflects the benefit of the acquisition we closed in late September that has helped mitigate the low natural production decline of our asset base compared with much higher declines in unconventional onshore reservoirs. Speaker 200:07:43We saw the benefit of 6 workovers during the 3rd quarter and will continue to focus on High returning work over and recompletions to help mitigate production decline going forward. On the cost side, While we continue to see inflationary pressures in the industry, our 3rd quarter results were very encouraging as we lowered our lease operating expense on an absolute basis and on a per share basis quarter over quarter. Our per barrel equivalent LOE declined from $19.60 in Q2 2023 to $18.72 in Q3 2023. We remain focused on cost control And margin expansion despite the current inflationary environment. For the Q4, our guidance for lease operating expense is expected to be between $60,500,000 $67,000,000 So we also continue to control our G and A cost In the Q3, we reported cash G and A of $16,700,000 which was within our guidance range. Speaker 200:08:45For the Q4, we expect cash G and A to be During 2023, we've reduced total debt by almost $300,000,000 from year end 2022. Speaker 300:09:04At the Speaker 200:09:04end of the Q3, we had net debt of $248,200,000 which was total debt of over of $397,200,000 net of cash and cash equivalents of $149,000,000 So as I mentioned Previously, the large reduction in total debt was driven by issuing new 2026 senior secured lien notes in January 2023. Those were issued at par totaling $275,000,000 in a private offering and using the proceeds along with a portion of our considerable cash position to retire all of our outstanding 2023 senior second lien notes. We continue to have the flexibility in dry powder to make additional acquisitions, continue to build cash and all the while further paying down debt. Now in quarter 3, 2023, we spent $8,000,000 in CapEx and have invested $31,000,000 for the 1st 9 months of this year. As I mentioned in our Q2 call, we lowered our CapEx range for 2023 by about $40,000,000 to be in a range of $50,000,000 $70,000,000 Included in this range are planned expenditures related to long lead drilling related items, capital costs for facilities, leasehold, seismic and recompletions. Speaker 200:10:23We expect to continue generating meaningful free cash flow, which provides us flexibility to execute on accretive opportunities very quickly. So as we look to next year, we plan to begin drilling again. We'll provide additional details on our 2024 capital investment plan during our year end call in early March. In the meantime, we plan to spud our Deepwater Holy Grail prospect at Magnolia in the Q1 of 2024. We have the rig under contract and expect the well to take around 6 to 8 months to drill and complete. Speaker 200:10:56It will be drilled off the Magnolia platform, which will allow the well to be We identified this proved undeveloped opportunity after we acquired Magnolia in December 2019. We believe it's a low risk opportunity with large production potential for us since we are the sole leaseholder. We are hoping to further advance our outstanding results through the recent acquisition of significant depth and breadth to our Leadership team. Over the past several months, we've appointed or promoted several members to our leadership team that I believe will be great additions and help maintain W and T's successful efforts into the future. So as I mentioned on the last call in early July, we appointed Sameer Parasnes This is our new Chief Financial Officer and welcomed him to our senior leadership team. Speaker 200:11:49In early September, we promoted Ford Peters to Vice President of Land. In early October, we appointed John Poole as our new Vice President of HSE and R. John's experience will be particularly important toward enhancing our commitment to sustainability. So before I close the call, I'd like to tell you about our 2022 ESG report that we issued in mid August. W and T's culture of success and sustainability is built on environmental stewardship, sound corporate governance and contributing positively to our employees and the communities where we work and operate. Speaker 200:12:27Ongoing commitment to ESG includes making a concerted effort and reaching out to our major shareholders for feedback and addressing their concerns while continuously improving our ESG metrics and transparency. To assist with development, implementation and monitoring of ESG initiatives and policies, we've established an ESG committee with our newest board member, Doctor. Nancy Chang, As the Chair of the Committee, we believe that Doctor. Chang will help guide our continuous improvement and assist us in our commitment So since our inaugural 2019 report, we've seen our total Scope 1 GHG emissions decreased by 20%. Our onshore facility air We're also reaching out to our shareholders to elicit feedback on stay on pay, Performance alignment and ESG initiatives. Speaker 200:13:37In 2023, we've enacted additional substantive changes to compensation programs Based on this feedback, we plan to continue to engage with our major shareholders to ensure alignment. So in closing, we're very pleased with how well we performed thus far in 2023, both operationally and financially. I'd like to thank our team at W and T as I believe we're well positioned for continued success in the future. Our strong financial position provides us with optionality and flexibility moving forward. Our liquidity and cash position Enables us to continue to evaluate growth opportunities, both organically and inorganically. Speaker 200:14:16And we're poised to Executing on accretive opportunities that meet our long standing improving criteria. We believe the Gulf of Mexico is and will continue to be World class basin with strong producing assets. Quickly evaluating and executing on opportunities within our focus area is a pillar of our success. We have a premier portfolio of both shallow water and deepwater properties in the Gulf of Mexico that have low decline rates And significant upside. Our management team's interests are highly aligned with those of our shareholders, given our 34% stake in W and D's equity, which is one of the highest of any public E and P company. Speaker 200:14:59We welcome the positive mood and improved outlook for our industry. I believe W and T will continue to build value for shareholders as we execute our strategy. We're happy to be returning value again to shareholders in cash. With that, operator, we can open the lines for questions. Operator00:15:18Thank you. We will now begin the question and answer session. Our first question comes from Nate Pendleton with Stifel. Please go ahead. Speaker 400:15:50Good morning, all. Congrats on another strong quarter and the new dividend. Speaker 200:15:55Thanks, Nate. Speaker 400:15:57My first question, With your continued success in the M and A market, I wanted to get your thoughts on the opportunity set and the size of the packages you are seeing on the market today? Speaker 200:16:08The opportunity set is always good. It's a matter of pricing and timing As the price of oil and natural gas float up and down, it makes it difficult for people to make decisions about How they want to move forward. We recognize that. We're patient. We just we adhere to the principles that we've established over time. Speaker 200:16:33And that carries us through and but it does require some patience. I think that the company is well positioned Going forward to either make acquisitions or drill. And we'll have a little bit more on that later on in the year. Speaker 400:16:54Thanks. And given your ability to optimize production and use workovers to mitigate decline rates in the quarter, Can you provide us any details on what you are able to do from an optimization perspective and how much more running room you have for further initiatives? Speaker 500:17:10Yes. This is William Williford. I'll answer that. Essentially, we kind of base it on Projects that we can think we can turn cash flow around pretty quickly and get good production associated with it. That's why you can see us Just from a strong cash flow position, you'll see a lot of expenses going out versus the cash we have going in. Speaker 500:17:31We kind of plan it out accordingly. So that's kind of how we So we can be efficiently spend our cash effectively. Speaker 400:17:41Got it. Thanks for taking my questions. Operator00:17:46Our next question comes from Jeff Robertson with Water Tower Research. Please go ahead. Speaker 300:17:51Thank you. Good morning. Tracy, can you provide any update on the Cox situation and the acquisition that you all talked about that I think is just tied up in court? Speaker 200:18:03Yes. Good morning, Jeff. Yes, that's a very good question. The bankruptcy process is a Particularly difficult one. There's a lot of emotion. Speaker 200:18:15There's a lot of debts that haven't been paid. Otherwise, they wouldn't be there. So the process is at best variable as to how it proceeds. We were the high bidder at the auction. And Since then and we'd actually gotten to the point where we signed a PSA with the debtor. Speaker 200:18:49However, there are other interests that weren't interested in it because it didn't relay a Particularly good return to them. But it's really a hard situation for everyone. Nobody's happy. Everybody's Usually, in a position where they're losing money and nobody likes to lose, I think it just will require more patience. I can't tell you that I fully understand the process. Speaker 200:19:19I'm not sure if anyone fully understands the process. We've been in this Position before looking for properties through bankruptcy courts. It's a difficult Situation for all and the best thing to do is just be patient and see what develops because There's going to be changes all along the way. So I think it's going to take a little while longer to sort it out. We don't know 100% if this is something that will happen favorably toward us or how it will end up In the next several weeks. Speaker 300:20:02Tracy, the acquisition that you did close in the 3rd quarter. Can you talk about what impact, if any, that has on W and T's overall corporate decline? Speaker 500:20:16Yes. Essentially, if you looked at the press release we put out there, I think we said it was around 2,400 Barrels associated with quarter north once we had it at full production. I think when we first got the asset Under our roof, we actually kind of look at it and see what we can do. As far as efficient things that we get more efficient, optimize production and that sort of thing, sometimes we We got to look at some of the facilities and do some spend some costs there to kind of look at the future And maintaining production over time. And with that increase, that kind of helps maintain our overall decline for the company. Speaker 200:20:57I'll add to that just a little bit, Jeff, in that very often when we first make these acquisitions, The seller isn't spending a lot of money on maintenance and the other things that they would normally spend money on. Speaker 300:21:15Lastly, Tracy, are you willing to share an AFE for Holy Grail? Speaker 200:21:21Well, I don't think I have those total dollar amounts yet. We're still working on some of the longer lead items that We need to resolve the rig will be coming from the bank to get offshore. So I'll probably be able to give you a little more clarity on that in after the 1st of the year. Speaker 300:21:43Thanks. And to be clear, the longer lead items Some of the items that would allow you to tie this in pretty quickly, right? Speaker 200:21:50Yes. Thank you. Thank you, sir. Operator00:22:08Showing no further questions, I would like Speaker 300:22:10to turn the conference back over to Tracy Krant for any closing remarks. Speaker 200:22:16Thank you, operator. Thanks for joining us this quarter. We're happy that we're on a really good track For this year and also very happy to be returning dividends again to shareholders. So we look forward to that for a long time. And we appreciate your attendance and we'll talk to you very soon. Speaker 200:22:37Thank you. Operator00:22:40The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.Read morePowered by