- Provides strong producing properties, all of which are 100% working interest (average 82% net revenue interest) and are located adjacent to W&T existing area of operations;
- The six fields acquired include
Eugene Island 064,Main Pass 061, Mobile 904, Mobile 916,South Pass 049 andWest Delta 073;
- The six fields acquired include
- Includes estimated production that has ranged from approximately 3,700 to 5,700 barrels of oil equivalent per day ("BOEPD") (around 68% liquids) during the period month-to-date
January 19, 2024 . The Company believes that it can meaningfully increase production on these properties through workovers, recompletions and facility repairs;- The six fields acquired produced approximately 8,300 BOEPD (48% liquids) on average in
April 2023 , the month prior to the bankruptcy filing by the Debtors inMay 2023 ;
- The six fields acquired produced approximately 8,300 BOEPD (48% liquids) on average in
- Adds significant proved reserves (“1P”) of 18.7 million barrels of oil equivalent (“MMBOE”) (62% liquids) as of
January 1, 2024 at year-end 2023SEC pricing with a present value discounted at 10% (“PV-10”) value of$250.4 million 1 based on an independent engineering report prepared byNetherland Sewell and Associates (“NSAI”); - Provides material upside with proved plus probable reserves (“2P”) of 60.6 MMBOE (78% liquids) as of
January 1, 2024 at year-end 2023SEC pricing with a PV-10 value of$629.2 million 1 based on an independent engineering report prepared by NSAI; and - Accretive cash multiple of approximately 1.0x last twelve months asset cash flows as of
October 31, 2023 2, and production multiple of approximately$16,950 per BOEPD based on average estimated production range for the period month-to-dateJanuary 19, 2024 .
The six fields acquired include
As a result of this additional accretive acquisition, W&T plans to invest additional funds for increasing production and reducing costs in these assets long term. The Company now plans to defer the drilling of Holy Grail, which is a proven undeveloped well in our Magnolia field. The Company will be exploring a Drilling Joint Venture, similar to what it did with investors in 2018 through
About
Cautionary Note Regarding Forward Looking Statements
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements, including but not limited to, statements regarding the benefits of the acquisition, expected synergies, expected production and increases in production, expected cash flow generated by the assets, uses of capital, drilling and operations plans and potential joint ventures and financing structures, and other statements herein, reflect our current views with respect to future events, based on what we believe are reasonable estimates and assumptions. No assurance can be given, however, that these events will occur or that our expectations will be correct. These statements are subject to risks and uncertainties that could cause actual results to differ materially including, among other things, risks pertaining to the integration of the assets, market conditions, commodity price volatility, uncertainties inherent in oil and gas production operations and estimating reserves, uncertainties of the timing and impact of bringing new wells online and repairing and restoring infrastructure due to hurricane damage, the ability to achieve leverage targets, unexpected future capital expenditures, competition, the success of our risk management activities, governmental regulations, uncertainties and other factors described or referenced in W&T’s Annual Report on Form 10-K for the year ended
Non-GAAP Information
The Company has disclosed the present value of future net pre-tax cash flows attributable to estimated net proved (1P) and net probable (2P) reserves, discounted at 10% (PV-10), which is not a financial measure defined under GAAP. Both PV-10 and PV-10 after Asset Retirement Obligation (ARO) are computed on the same basis as the standardized measure of discounted future net cash flows but does not include a provision for federal income taxes. Management believes that PV-10 and PV-10 after ARO are relevant and useful for evaluating the relative monetary significance of oil and natural gas properties. PV-10 and PV-10 after ARO are used internally when assessing the potential return on investment related to oil and natural gas properties and in evaluating acquisition opportunities. W&T believes the use of pre-tax measures, including PV-10, is valuable because there are many unique factors that can impact an individual company when estimating the amount of future income taxes to be paid. Management believes that both PV-10 and PV-10 after ARO provide useful information to investors because they are widely used by professional analysts and sophisticated investors in evaluating oil and natural gas companies. PV-10 and PV-10 after ARO are not measures of financial or operating performance under GAAP, nor is it intended to represent the current market value of W&T’s estimated oil and natural gas reserves. PV-10 and PV-10 after ARO should not be considered in isolation or as substitutes for the standardized measure of discounted future net cash flows as defined under GAAP.
The table below provides a reconciliation of PV-10 and PV-10 after ARO to the standardized measure of discounted future net cash flows (in millions of dollars):
1P | 2P | ||||
Standardized measure | $ | 184.2 | $ | 472.3 | |
Future income taxes, discounted at 10% | 43.2 | 132.5 | |||
PV-10 after ARO (Non-GAAP) | 227.4 | 604.8 | |||
Present value of estimated ARO, discounted at 10%3 | 23.0 | 24.4 | |||
PV-10 (Non-GAAP) | $ | 250.4 | $ | 629.2 |
CONTACTS: | ||
Investor Relations Coordinator | Executive VP and CFO | |
investorrelations@wtoffshore.com | sparasnis@wtoffshore.com | |
713-297-8024 | 713-513-8654 |
1 PV-10 is a non-GAAP financial measure, which is described and reconciled to the most comparable GAAP measure below in the accompanying table under “Non-GAAP Information.”
2 Based on the latest available lease operating statement provided by the Debtors.
3 Estimates for Asset Retirement Obligation are internal management estimates and subject to change.
Source:
2024 GlobeNewswire, Inc., source