W&T Offshore Reports Third Quarter and Year-to-Date 2012 Financial and Operational Update

    W&T Offshore Reports Third Quarter and Year-to-Date 2012 Financial and
                              Operational Update

PR Newswire

HOUSTON, Oct. 30, 2012

HOUSTON, Oct. 30, 2012 /PRNewswire/ --W&T Offshore, Inc. (NYSE: WTI) today
announces financial and operational results for the third quarter of 2012.
Some of the highlights include:

  oOn October 5, 2012, closed on the previously announced acquisition of
    exploration and production properties in the Gulf of Mexico from Newfield
    Exploration Company and one of its subsidiaries for an adjusted purchase
    price of $208 million, plus assumption of certain plug and abandonment
    liabilities. Acquired 78 federal offshore lease blocks (65 of which are
    in the deepwater) on approximately 416,000 gross acres, excluding
    overriding royalty interests. No preferential rights were exercised;
    accordingly, all of the properties that were part of the package remained
    in the transaction. These properties are expected to produce in the range
    of 3.4 to 4.4 Bcfe for the fourth quarter of 2012.
  oCompleted a $300 million debt offering of 8.5% senior notes due June 2019,
    the proceeds of which will be used to pay down the revolving credit
    facility balance incurred by purchasing Newfield's Gulf of Mexico assets.
    The notes were issued at 106% of par resulting in a yield of 6.96% and
    gross proceeds of $318 million. The offering was completed on October 17,
    after the close of the third quarter.
  oFor the third quarter of 2012, production volumes averaged 40,500 barrels
    of oil equivalent per day, or 242.7 MMcf of natural gas equivalent per
    day. Production was deferred by tropical storm activity as well as
    third-party pipeline outages during the quarter. Production volumes were
    split 37% oil, 12% natural gas liquids ("NGLs") and 51% natural gas. Our
    average realized sales price was $100.68 per barrel for oil, $27.66 per
    barrel for NGLs and $3.07 per Mcf for natural gas. We expect to produce
    between 50,000 and 55,000 Boe per day in the fourth quarter and expect our
    production rate to be similar at year-end.
  oAwarded 11 blocks (approximately 47,200 acres) totaling approximately $2.5
    million from the June 2012 Central Gulf of Mexico Lease Sale 216/222 held
    in New Orleans, LA. These new lease blocks enhance our exploration
    opportunity portfolio in the Gulf of Mexico.
  oIn the first nine months of 2012, we have had 100% drilling success and
    completed a total of 58 wells. During the third quarter we completed 19
    wells, including; one development well on the shelf of the Gulf of Mexico,
    17 vertical wells in the Permian Basin of West Texas, and one horizontal
    well in East Texas. Commenced horizontal drilling activity in West Texas.
    Net production at our Yellow Rose properties recently reached 3,000 Boe
    per day net, the highest daily volumes so far this year. This is up from
    approximately 2,500 Boe per day net or 20%, since the beginning of the
    year.
  oRevenues for the quarter were $185.9 million. Oil and NGLs sales
    represented 81% of total revenues.
  oNet income and earnings per share for the third quarter of 2012, excluding
    special items, were $14.4 million and $0.19, respectively.
  oAdjusted EBITDA for the quarter was $109.7 million and our adjusted EBITDA
    margin was 59%. Net cash provided by operating activities for the first
    nine months of 2012 was $351.5 million. Capital expenditures and other
    investing activities for the first nine months of 2012 were $330.9 million
    and we distributed $17.8 million in dividends.

"Our acquisition of Gulf of Mexico properties from Newfield adds significant
unrisked exploratory potential to our portfolio while also adding production,
reserves, and cash flow beginning in the fourth quarter," stated Tracy W.
Krohn, Chairman and Chief Executive Officer. "In the fourth quarter, we
expect to be generating much higher production that is receiving premium oil
prices and improved natural gas prices, driving stronger cash flow." 

"For the balance of 2012, we will remain very active as we continue to drill
our growing inventory of exploration and development projects. Similarly, we
continue to evaluate the substantial acquisition opportunities currently in
the market place. Our drilling program over the near-term will be focused on
a variety of exploration projects, both onshore and offshore, that if
successful could add reserves and production. We have identified at least
five exploration wells that we may choose to commence drilling in the next few
months. Additionally, to further expand our prospect inventory we have
acquired a large quantity of the latest seismic data to help us better
evaluate the leasehold acreage we acquired from Newfield, prospects in the
recent Gulf of Mexico lease sales, and our existing property inventory. We
have also expanded our exploration team and are incorporating in-house
processing using the most modern techniques."

Revenues, Production & Price: Revenues for the third quarter of 2012 were
$185.9 million compared to $245.4 million in the third quarter of 2011.
During the third quarter of 2012, we sold 1.4 million barrels of oil, 0.5
million barrels of NGLs and 11.4 Bcf of natural gas as compared to 1.5 million
barrels of oil, 0.5 million barrels of NGLs and 14.3 Bcf of natural gas for
the same period of 2011. In total, we sold 3.7 million Boe at an unhedged
average realized sales price of $49.86 per Boe. During the third quarter of
2012 we experienced deferred production as a result of third-party pipeline
outages and the impact of both Tropical Storm Debby and Hurricane Isaac.
Fortunately, we experienced very minimal property damage as a result of the
2012 tropical storm season. When combined, the storms and pipeline outages
reduced total third quarter production by approximately 0.8 million Boe. Full
year production estimates were also impacted by the sale of South Timbalier 41
in the spring and the recent sanding up of the Mississippi Canyon 243 A2 ST
well. These will be partially offset by the addition of the newly acquired
properties from Newfield. In addition, we expect to begin drilling a
sidetrack of the MC 243 A2 well before the end of the year and hope to have it
back on production in the first quarter of 2013. We expect our fourth quarter
production to be significantly higher than the third quarter as indicated in
our guidance later in the press release.

The lower production volumes in the third quarter of 2012 reduced revenue by
approximately $31.0 million and lower prices reduced revenues by approximately
$28.5 million compared to the third quarter of 2011. Realized oil prices
(unhedged) were $100.68 per barrel. Our realized oil sales price was above
the average daily West Texas Intermediate price of $92.17 per barrel due to
higher premiums for offshore crude (the Brent crude oil price for that same
time frame was $109.63 per barrel). Our realized natural gas sales price was
$3.07 per Mcf, a significant drop from the $4.27 per Mcf sales price for the
same period in 2011, but higher than the year-to-date average of $2.72 per
Mcf. Our realized NGLs sales price was $27.66 per barrel for the third
quarter.

Net Income & EPS: Our operating results for the third quarter of 2012
resulted in a net loss of $1.5 million, or ($0.02) per common share, compared
to net income of $52.9 million, or $0.70 per common share for the same period
in 2011. Net income for the third quarter of 2012, excluding special items,
was $14.4 million, or $0.19 per common share. This compares to $42.4 million,
or $0.56 per common share, reported for the third quarter of 2011, excluding
special items. See the "Reconciliation of Net Income to Net Income Excluding
Special Items" and related earnings per share, excluding special items in the
table under "Non-GAAP Financial Information" at the back of this press release
for a description of the special items.

Cash Flow from Operating Activities and Adjusted EBITDA: EBITDA and Adjusted
EBITDA are non-GAAP measures and are defined in the "Non-GAAP Financial
Measures" section later in this press release.  Adjusted EBITDA for the third
quarter of 2012 was $109.7 million, compared to $161.5 million for the third
quarter of 2011. Our Adjusted EBITDA margin was 59% compared to 66% in the
third quarter of 2011. Adjusted EBITDA is lower in the 2012 period primarily
due to lower production volumes and lower average realized sales prices. Net
cash provided by operating activities for the first nine months of 2012 was
$351.5 million compared to $396.1 million for the same period of the prior
year.

Lease Operating Expenses ("LOE"): For the third quarter of 2012, LOE, which
includes base lease operating expenses, insurance, workovers, facilities
expenses, and hurricane remediation costs net of insurance claims, decreased
to $53.4 million from $58.9 million in the third quarter of 2011. Base LOE
decreased $9.1 million to $28.4 million primarily due to an ad valorem tax
refund, processing fees received from third parties, lower operating costs
incurred at our Fairway/Yellowhammer properties, the sale of South Timbalier
41 and lower repairs, maintenance and expenses. Workover costs were up $2.3
million to $8.5 million, insurance premiums were down $0.3 million to $7.6
million and facilities expenses were up $1.1 million to $8.9 million. The
increase in workover and facilities costs reflects increased activity at
several of our Gulf of Mexico properties.

Depreciation, depletion, amortization and accretion ("DD&A"): On a nominal
basis, DD&A decreased to $77.5 million in the third quarter of 2012 from $84.5
million in the third quarter of 2011 due to lower production volumes resulting
from the temporary deferral of production caused by tropical storm activity
and third party pipeline outages.

Capital Expenditures Update: Our capital expenditures budget for 2012 was
$425 million, excluding acquisitions. For the nine months ended September 30,
2012, our capital expenditures for oil and gas properties were $312.4 million
and were funded with cash flow from operating activities. Capital
expenditures included $178.7 million for onshore activities (split between
$49.1 million for exploration and $129.6 million for development activities),
$119.2 million for offshore activities (split between $10.0 million for
exploration and $109.2 million for development) and $14.5 million for seismic,
leasehold and other costs. Through the first nine months of 2012 we have
drilled and completed 58 wells in total, with 54 wells in West Texas, one well
in East Texas, and three wells in the Gulf of Mexico.

In the fourth quarter of we expect to spend approximately $66.2 million for
onshore activities, $70.0 million for offshore activities, and $1.5 million
for seismic, leasehold, and other costs. These estimated expenditures could
change based on the timing of third party operator decisions, permitting
schedules and access to equipment, post acquisition effective date
adjustments, among other things. See the Operations Update below for a
discussion of our planned operating activity.

Acquisition of Properties from Newfield and Funding: On October 5^th, we
completed the acquisition of exploration and production properties in the Gulf
of Mexico from Newfield Exploration, thereby adding production, reserves, cash
flow and several hundred million barrels of unrisked exploratory potential to
our portfolio. The adjusted purchase price was $208 million plus the
assumption of certain plug and abandonment liabilities. The acquisition was
initially funded from cash on hand and our revolving bank credit facility.

W&T acquired 78 offshore lease blocks, which includes 65 blocks in the
deepwater, dramatically increasing our exposure to deepwater opportunities.
The total gross acreage acquired was 432,700 acres.

The acquisition also included producing properties, six of which are in
deepwater, four on the shelf and two producing overriding royalty interests in
thedeepwater. We expect to take over operations of approximately 90% of the
production. Total proved and probable reserves acquired include 7.7 million
barrels of oil equivalent (MMBoe) and 1.2 MMBoe, respectively, per third-party
engineers' estimates as of July 1, 2012. For the first 23 days of October,
our average daily production from these properties was approximately 8,330 Boe
per day net.

On October 17^th, we completed a $300 million debt offering of 8.5% senior
notes due June 2019. The notes were issued at 106% of par resulting in a yield
of 6.96% and gross proceeds of $318 million. The net proceeds were used to
repay all of our outstanding indebtedness under our revolving credit facility,
a portion of which was recently incurred to partially fund ouracquisition of
properties from Newfield, and for general corporate purposes. This issuance
was under an indenture pursuant to which W&T Offshore initially issued on June
10, 2011, $600 million principal amount of its 8.5% senior notes due 2019.
Per the amendment to our credit agreement, the borrowing base was reduced
$0.25 for each additional $1.00 of unsecured debt issued until the fall 2012
redetermination. This reduces our revolving credit facility availability to
$575 million. We expect our borrowing base to be redetermined upward in early
November.

Operations  Review and Update:

Gulf of Mexico
Wells Completed in the Third Quarter 2012
 Block/Field Well WI%  Type        Location  Target     Net     Current Status
 Name                                                   Cost
                                                                Producing
 Ship Shoal  A-5                             Oil in P   ~$12.3  1,100 Boe
 349/359     ST   100  Development Shelf     sand at    million
 (Mahogany)                                 ~14,300'          per day net in
                                                                mid-October
Drilling Activity in the Third Quarter 2012
 Block/Field                                            Net
 Name        Well WI%  Type        Location  Target     Est.    Current Status
                                                        Cost
 Mississippi                                 Oil at     ~$20.2
 Canyon 698  #1   20   Exploration Deepwater ~15,300'  million Drilling
 (Big Bend)
                                             Gas in
 West        #2   30   Exploration Shelf     Cris R     ~$7.5   Completing
 Cameron 73                                  section at million
                                             ~18,100'
                                                                Reached TD
 Main Pass   #1   40   Exploration Shelf     Gas at     ~$2.9   10/15/12,
 163                                         ~8,650'    million deemed
                                                                non-commercial
 Ship Shoal  A-9                             Oil in P   ~$29.8
 349/359     ST   100  Development Shelf     sandat    million Drilling
 (Mahogany)                                 ~14,300'
Drilling Activity in the Fourth Quarter 2012
 Block/Field                                            Net
 Name        Well WI%  Type        Location  Target     Est.    Current Status
                                                        Cost
                                             Gas and
 MP 108      B-1  100  Exploration Shelf     liquids in ~$24.1  Spud in
             ST2                             Tex W 6    million November
                                             sand
             A-2                             Oil in the ~$15.6  Projected
 MC 243      ST   100  Development Deepwater A sand     million start in
                                                                December

OFFSHORE DEVELOPMENT:

Mahogany Field: During the third quarter of 2012, we completed and brought on
production the SS 349 A-5 ST well at our Mahogany Field, which is currently
producing approximately 1,100 Boe per day net. We continue to be very active
in that field and are currently drilling the A-9 ST well to further develop
the P sand south of the A-5 ST. Following the A-9 ST well, we will utilize
the rig for a recompletion of the Ship Shoal 349 A-2 well. We anticipate
spudding the A-14 development well in early 2013. The development of the
Mahogany Field will continue well into 2013. With the use of additional
seismic data and well results, we anticipate adding more wells to the existing
drilling program.

Matterhorn Field: At our Mississippi Canyon 243 A-2 ST, the well sanded up
following Hurricane Isaac. We plan to begin drilling a sidetrack well before
the end of the year in order to restore production. This well is expected to
be on production during the first quarter of 2013 and have initial production
of approximately 1,000 Boe per day net.

OFFSHORE EXPLORATION:

We participated in three non-operated exploratory wells in the Gulf of Mexico
during the third quarter. The West Cameron 73 #2 well has reached total depth,
encountered multiple stacked pays, and we are completing this well. This well
will likely be brought on production in the third quarter of 2013. Drilling
operations are also underway at our deepwater exploration well, Big Bend, at
Mississippi Canyon 698. The well was spud in mid-October and is expected to
reach the target depth by year end. Additionally, we participated in the
non-operated Main Pass 163 well, which reached total depth in October and the
objective was determined to be non-commercial.

In the fourth quarter we expect to drill the Main Pass 108 B-1 ST2, an
exploration shelf well. Once the MP 108 B-1 ST2 is drilled and completed, we
plan to drill the Main Pass 108 B-2 ST1 well in the first quarter of 2013. We
have a 100% working interest in both exploration wells. The Ship Shoal 349
A-14, a development well at our Mahogany field, which will include a deep
exploratory test extending beyond the targeted development sand, is planned to
commence early next year.

In regards to the recent OCS lease sale 216/222, we were awarded all 11 lease
blocks where W&T was high bidder. These 11 blocks provide an additional
47,212 acres at a cost of $2.46 million and in many instances are located in
close proximity to our current production and infrastructure. We are
initiating the permitting process and plan to incorporate these properties
into our drilling plans as early as 2013.

Onshore
Wells Completed in Third Quarter 2012
 Project &   WI% Type       # of Wells     Target    Net   Current Status
 Area                                                  Cost
Permian
Basin
                                            4,500' of  ~$2   Drilled on 40
 Yellow      100 Exploration 1 vertical    section in mil   acre spacing, on
 Rose                                      the        each  production
                                            Wolfberry
                                            4,500' of  ~$2   Drilled on 80
 Yellow      100 Development 16 vertical    section in mil   acre spacing, on
 Rose                                      the        each  production
                                            Wolfberry
East Texas
 Star                                                        2nd well of 4
 Prospect    97  Exploration 1 horizontal   James Lime ~$9.9 well delineation
 Sinclair                                   Horizontal mil   program
 399 #1
Drilling Activity in the Third Quarter 2012
 Project &                                             Net
 Area        WI% Well Type   # of Wells     Target    Est.  Current Status
                                                       Cost
Permian
Basin
                                            4,500' of  ~$2   Reached TD,
 Yellow      100 Development 16 vertical   section in mil   awaiting
 Rose                                      the        each  completion
                                            Wolfberry
 Yellow Rose 100 Exploration 1 horizontal  Horizontal ~$6.9 Awaiting final
 Chablis #6H                                Wolfcamp mil   completion
 Yellow Rose                                Horizontal ~$6.7 Frac'd October
 Pinotage    100 Exploration 1 horizontal   Wolfcamp mil   16th, currently
 #8H                                                         on flowback
 Terry
 County      90  Exploration 1 horizontal   Horizontal ~$7.0 Reached TD,
 Holmes 23-4                                Wolfcamp mil   preparing to frac
 #1H
East Texas
                                                             3rd well of 4
 Star                                                        well delineation
 Prospect    97  Exploration 1 horizontal   James Lime ~$7.3 program -
 Colwell A8                                 Horizontal mil   completed,
 #1H                                                         initiating
                                                             flowback
Drilling Activity in the Fourth Quarter 2012
 Project &                                             Net
 Area        WI% Well Type   # of Wells     Target    Est.  Current Status
                                                       Cost
Permian
Basin
                                            4,500' of  ~$2
 Yellow      100 Development ~12 vertical   section in mil   Three rigs
 Rose                                      the        each  running
                                            Wolfberry
 Yellow      100 Exploration 1 horizontal  Horizontal ~$6.2 Drilling
 Rose                                      Wolfcamp mil
 Terry
 County                                     Horizontal ~$5.5
 State       90  Exploration 1 horizontal   Wolfcamp mil   Drilling
 Travis
 Henson #1H
East Texas
 Star                                                        4th well of 4
 Prospect                                   James Lime ~$7.6 well delineation
 McMahon     97  Exploration 1 horizontal   Horizontal mil   program -
 A-28 #1H                                                    currently
                                                             drilling

ONSHORE EXPLORATION AND DEVELOPMENT:

Yellow Rose Properties: Our Yellow Rose project is located in the West Texas
portions of Andrews, Martin, Dawson and Gaines Counties. This property was
acquired in May of 2011 from Opal Resources. During the third quarter, we
completed 17 vertical wells and at the end of the quarter had approximately 16
wells awaiting completion. Also during the quarter, we began our horizontal
drilling program targeting the Wolfcamp formation. The first horizontal well
is awaiting final completion; the second horizontal well is in flowback and;
the third horizontal well is currently drilling. September production from
our Yellow Rose Field averaged 2,500 Boe per day net. Production has
continued to increase in the field and our daily production as of late October
is approximately 3,000 Boe per day net. For the remainder of the year, we
expect to continue our multi-rig program which will continue well into 2013.
Our rig line-up could change depending on our ultimate evaluation of our
horizontal well program and down spacing from our current 80 acres to 40
acres.

Terry County: We have an acreage position of approximately 9,500 acres in
Terry County. We have continued with our exploration and delineation phase of
this prospect during the quarter. During the third quarter we spud the first
of two planned horizontal wells targeting the Wolfcamp. The first horizontal
well reached TD in mid-October and has been frac'd. The second horizontal
well, the State Travis-Henson Unit 20 #1-H is currently drilling. After we
evaluate the results of these two wells, we expect to be able to provide our
future development plans for this acreage. We do not currently have any
reserves booked for our Terry County project.

Star Project: This is a project encompassing a six county area in East Texas
comprised of 143,000 net acres. We are conducting a four well exploration
program targeting the oil rich James Lime formation. The first two wells are
in their test phase. During the third quarter we commenced drilling the
Colwell A-8 well which is completed and we are initiating flowback. The
fourth well, the McMahon A-28 is currently drilling. We expect this well to
reach TD, be completed, and placed on flowback by year-end. We anticipate
that the results of these four wells should provide sufficient data to
delineate the project and determine future development plans.

Recompletes and Workovers: During the quarter we completed four workovers and
four recompletes offshore and 50 workovers onshore. The combined cost was
$8.6 million and initial production from these projects was 17.1 MMcfe per day
or 2,800 Boe per day. We will continue with our recompletion and workover
programs throughout the remainder of the year.

Outlook: The guidance for full year 2012 represents the Company's best
estimate of the range of likely future results, and is affected by the factors
described below in "Forward-Looking Statements."

On October 5, 2012, we updated our guidance for the full year 2012 due to the
closing of the acquisition of the Newfield properties and a number of events
that impacted third quarter production including; the effect of production
deferral resulting from Hurricane Isaac, Tropical Storm Debbie and third-party
pipeline outages; the sale of our South Timbalier 41 field; and the sanding up
of our Mississippi Canyon 243 A-2 ST well.

In the fourth quarter of 2012, we will benefit from the contribution of the
properties acquired from Newfield, which are expected to contribute between
3.4 and 4.4 Bcfe to our 2012 annual guidance.

                                             Prior Full-Year Revised Full-Year
Estimated Production
                                             2012            2012
Oil and NGLs (MMBbls)                        N/A             8.0 – 8.3
Natural gas (Bcf)                            N/A             54.7 – 56.8
Total (Bcfe)                                 103 – 107       103 – 107
Total (MMBoe)                                17.1 – 17.8     17.1 – 17.8
Operating Expenses                           Prior Full-Year Revised Full-Year

($ in millions)                              2012            2012
Lease operating expenses                     $215 – $237     no change
Gathering, transportation & production taxes $25– $35        no change
General and administrative                   $75 – $85       no change
Income tax rate                              38%             no change

Conference Call Information: W&T will hold a conference call to discuss these
financial and operational results on Wednesday, October 31, 2012, at 10:00
a.m. Eastern Time. To participate, dial (480) 629-9645 a few minutes before
the call begins. The call will also be broadcast live over the Internet from
the Company's website at www.wtoffshore.com. A replay of the conference call
will be available approximately two hours after the end of the call until
November 7, 2012, and may be accessed by calling (303) 590-3030 and using the
pass code 4568692#.

About W&T Offshore

W&T Offshore, Inc. is an independent oil and natural gas producer focused
primarily in the Gulf of Mexico and Texas. We have grown through
acquisitions, exploration and development and currently hold working interests
in approximately 67 producing offshore fields in federal and state waters,
including the deepwater. During 2011, we expanded onshore into West Texas and
East Texas where we are actively pursuing exploration and development
activities. A substantial majority of our daily production is derived from
wells we operate offshore. For more information on W&T Offshore, please visit
our website at www.wtoffshore.com.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. These forward-looking statements reflect our current
views with respect to future events, based on what we believe are reasonable
assumptions. No assurance can be given, however, that these events will occur.
These statements are subject to risks and uncertainties that could cause
actual results to differ materially including, among other things, market
conditions, oil and gas price volatility, uncertainties inherent in oil and
gas production operations and estimating reserves, unexpected future capital
expenditures, competition, the success of our risk management activities,
governmental regulations, uncertainties and other factors discussed in W&T
Offshore's Annual Report on Form 10-K for the year ended December 31, 2011 and
subsequent Form 10-Q reports found at www.sec.gov or at our website at
www.wtoffshore.com under the Investor Relations section.

W&T OFFSHORE, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Income (Loss)
(Unaudited)
                                Three Months Ended      Nine Months Ended
                                September 30,           September 30,
                                2012        2011        2012        2011
                                (In thousands, except per share data)
Revenues^                      $ 185,946   $ 245,371   $ 637,345   $ 709,148
Operating costs and expenses:
Lease operating expenses        53,411      58,899      170,349     159,901
Gathering, transportation         4,163       5,903       15,314      15,386
costs and production taxes
Depreciation, depletion,          77,462      84,455      251,894     241,917
amortization and accretion
General and administrative        18,691      18,104      62,793      54,235
expenses
Derivative (gain) loss            24,659      (17,323)    14,421      (10,815)
Total costs and expenses          178,386     150,038     514,771     460,624
Operating income                  7,560       95,333      122,574     248,524
Interest expense:
Incurred                          14,791      14,721      43,409      36,913
Capitalized                       (3,383)     (3,163)     (9,899)     (6,654)
Loss on extinguishment of debt    -           2,031       -           22,694
Other income                      202         6           210         22
Income (loss) before income       (3,646)     81,750      89,274      195,593
tax expense (benefit)
Income tax expense (benefit)     (2,175)     28,822      33,959      68,841
Net income (loss)              $ (1,471)   $ 52,928    $ 55,315    $ 126,752
Basic and diluted earnings      $ (0.02)    $ 0.70      $ 0.73      $ 1.68
(loss) per common share
Weighted average common shares    74,327      74,029      74,315      74,639
outstanding
Consolidated Cash Flow
Information
Net cash provided by operating  $ 110,164   $ 166,206   $ 351,489   $ 396,051
activities
Capital expenditures and          125,088     137,027     312,372     619,804
acquisitions



W&T OFFSHORE, INC. AND SUBSIDIARIES
Condensed Operating Data
(Unaudited)
                                      Three Months Ended   Nine Months Ended
                                      September 30,        September 30,
                                      2012       2011      2012       2011
Net sales volumes:
Oil (MBbls)                           1,371      1,524     4,361      4,495
NGL (MBbls)                            451        501       1,581      1,279
Oil and NGLs (MBbls)                    1,822      2,025     5,942      5,774
Natural gas (MMcf)                     11,401     14,332    40,097     39,384
Total oil and natural gas (MBoe)^(1)    3,722      4,414     12,625     12,338
Total oil and natural gas               22,331     26,483    75,749     74,025
(MMcfe)^(1)
Average daily equivalent sales          40.5       48.0      46.1       45.2
(MBoe/d)
Average daily equivalent sales          242.7      287.9     276.5      271.2
(MMcfe/d)
Average realized sales prices
(Unhedged):
Oil ($/Bbl)                           $ 100.68   $ 102.14  $ 105.89   $ 103.78
NGLs ($/Bbl)                            27.66      56.43     40.99      55.45
Oil and NGLs ($/Bbl)                    82.62      90.84     88.63      93.08
Natural gas ($/Mcf)                     3.07       4.27      2.72       4.34
Barrel of oil equivalent ($/Boe)        49.86      55.54     50.36      57.40
Natural gas equivalent ($/Mcfe)         8.31       9.26      8.39       9.57
Average realized sales prices
(Hedged):^(2)
Oil ($/Bbl)                           $ 100.05   $ 101.54  $ 104.30   $ 101.73
NGLs ($/Bbl)                            27.66      56.43     40.99      55.45
Oil and NGLs ($/Bbl)                    82.14      90.39     87.46      91.48
Natural gas ($/Mcf)                     3.07       4.27      2.72       4.34
Barrel of oil equivalent ($/Boe)        49.62      55.33     49.81      56.65
Natural gas equivalent ($/Mcfe)         8.27       9.22      8.30       9.44
Average per Boe ($/Boe):
Lease operating expenses             $ 14.35    $ 13.34   $ 13.49    $ 12.96
Gathering and transportation costs      1.12       1.34      1.21       1.25
and production taxes
Depreciation, depletion,                20.81      19.13     19.95      19.61
amortization and accretion
General and administrative expenses    5.02       4.10      4.97       4.40
Net cash provided by operating          29.60      37.66     27.84      32.10
activities
Adjusted EBITDA                         29.48      36.60     30.98      38.13
Average per Mcfe ($/Mcfe):
Lease operating expenses             $ 2.39     $ 2.22    $ 2.25     $ 2.16
Gathering and transportation costs      0.19       0.22      0.20       0.21
and production taxes
Depreciation, depletion,                3.47       3.19      3.33       3.27
amortization and accretion
General and administrative expenses    0.84       0.68      0.83       0.73
Net cash provided by operating          4.93       6.28      4.64       5.35
activities
Adjusted EBITDA                         4.91       6.10      5.16       6.35

    Bcfe and MMBoe are determined using the ratio of six Mcf of natural gas to
    one Bbl of crude oil, condensate or NGLs (totals may not compute due to
(1) rounding). The conversion ratio does not assume price equivalency and the
    price on an equivalent basis for oil, NGLs and natural gas may differ
    significantly.
(2) Data for 2012 and 2011 includes the effects of our commodity derivative
    contracts that did not qualify for hedge accounting.

W&T OFFSHORE, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(Unaudited)
                                                  September 30,   December 31,
                                                  2012            2011
                                                  (In thousands, except
                                                  share data)
Assets
Current assets:
Cash and cash equivalents                         $  6,993        $  4,512
Receivables:
 Oil and natural gas sales                         68,230          98,550
 Joint interest and other                          21,105          25,804
 Income taxes                                      14,284          -
 Total receivables                              103,619         124,354
Deferred income taxes                                -               2,007
Restricted cash and cash equivalents                 24,026          -
Deposit for acquisition                              22,800          -
Prepaid expenses and other assets                    32,455          30,315
Total current assets                                 189,893         161,188
Property and equipment – at cost:
Oil and natural gas properties and equipment
(full cost method, of which $158,585 at
September 30, 2012 and $154,516 at December 31,
2011 were excluded from
amortization)                                        6,229,626       5,959,016
Furniture, fixtures and other                        20,912          19,500
Total property and equipment                         6,250,538       5,978,516
Less accumulated depreciation, depletion and         4,556,548       4,320,410
amortization
Net property and equipment                           1,693,990       1,658,106
Restricted deposits for asset retirement             28,441          33,462
obligations
Other assets                                         14,328          16,169
Total assets                                      $  1,926,652    $  1,868,925
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable                                  $  104,274      $  75,871
Undistributed oil and natural gas proceeds           34,660          33,732
Asset retirement obligations                        83,545          138,185
Accrued liabilities                                  32,331          29,705
Income taxes                                        350             10,392
Deferred income taxes - current portion              2,945           -
Total current liabilities                            258,105         287,885
Long-term debt                                       719,000         717,000
Asset retirement obligations, less current           250,704         255,695
portion
Deferred income taxes                                98,393          58,881
Other liabilities                                    9,470           4,890
Commitments and contingencies                        -               -
Shareholders' equity:
Common stock, $0.00001 par value; 118,330,000
shares authorized; 77,242,660
issued and 74,373,487 outstanding at September
30, 2012; 77,220,706 issued and
74,351,533 outstanding at December 31, 2011          1               1
Additional paid-in capital                           396,601         386,920
Retained earnings                                    218,545         181,820
Treasury stock, at cost                              (24,167)        (24,167)
Total shareholders' equity                           590,980         544,574
Total liabilities and shareholders' equity        $  1,926,652    $  1,868,925

W&T OFFSHORE, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(Unaudited)
                                                    Nine Months Ended
                                                    September 30,
                                                    2012          2011
                                                    (In thousands)
Operating activities:
Net income                                         $ 55,315      $ 126,752
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation, depletion, amortization and             251,894       241,917
accretion
Amortization of debt issuance costs                 2,046         1,401
Loss on extinguishment of debt                       -             22,694
Share-based compensation                            9,137         6,437
Derivative (gain) loss                              14,421        (10,815)
Cash payments on derivative settlements             (6,960)       (9,239)
Deferred income taxes                               44,465        59,442
Asset retirement obligation settlements             (63,150)      (51,349)
Changes in operating assets and liabilities          44,321        8,811
Net cash provided by operating activities            351,489       396,051
Investing activities:
Acquisitions of property interests in oil and         -             (434,582)
natural gas properties
Investment in oil and natural gas properties and      (312,372)     (185,222)
equipment
Proceeds from sales of oil and natural gas            30,453        15
properties and equipment
Change in restricted cash                            (24,026)      -
Deposit for acquisition                               (22,800)      -
Purchases of furniture, fixtures and other           (2,125)       (318)
Net cash used in investing activities                (330,870)     (620,107)
Financing activities:
Issuance of Senior Notes                             -             600,000
Repurchase of Senior Notes                           -             (450,000)
Borrowings of long-term debt                         316,000       512,000
Repayments of long-term debt                         (314,000)     (418,000)
Dividends to shareholders                            (17,848)      (8,936)
Repurchase premium and debt issuance costs            (2,081)       (31,997)
Other                                                 (209)         -
Net cash (used in) provided by financing              (18,138)      203,067
activities
Increase (decrease) in cash and cash equivalents     2,481         (20,989)
Cash and cash equivalents, beginning of period       4,512         28,655
Cash and cash equivalents, end of period           $ 6,993       $ 7,666

W&T OFFSHORE, INC. AND SUBSIDIARIES
Non-GAAP Information

Certain financial information included in our financial results are not
measures of financial performance recognized by accounting principles
generally accepted in the United States, or GAAP. These non-GAAP financial
measures are "Net Income Excluding Special Items," "EBITDA" and "Adjusted
EBITDA." Adjusted EBITDA margin represents the ratio of Adjusted EBITDA to
total revenues. Our management uses these non-GAAP financial measures in its
analysis of our performance. These disclosures may not be viewed as a
substitute for results determined in accordance with GAAP and are not
necessarily comparable to non-GAAP performance measures which may be reported
by other companies.

Reconciliation of Net Income to Net Income Excluding Special Items

"Net Income Excluding Special Items" does not include the unrealized
derivative (gain) loss, a litigation accrual, loss on extinguishment of debt,
and associated tax effects. Net Income excluding special items is presented
because the timing and amount of these items cannot be reasonably estimated
and affect the comparability of operating results from period to period, and
current periods to prior periods.

                              Three Months Ended       Nine Months Ended
                              September 30,            September 30,
                              2012        2011         2012        2011
                              (In thousands, except per share amounts)
                              (Unaudited)
Net income (loss)            $ (1,471)   $ 52,928     $ 55,315    $ 126,752
Unrealized commodity            23,784      (18,240)     7,461       (20,054)
derivative (gain) loss
Loss on extinguishment of       -           2,031        -           22,694
debt
Litigation accrual             700         -            9,000       -
Income tax adjustment for       (8,569)     5,673        (5,761)     (924)
above items at statutory rate
Net income excluding special  $ 14,444    $ 42,392     $ 66,015    $ 128,468
items
Basic and diluted earnings
per common share, excluding   $ 0.19      $ 0.56       $ 0.87      $ 1.70
special items

Reconciliation of Net Income to Adjusted EBITDA

We define EBITDA as net income plus income tax expense, net interest expense,
depreciation, depletion, amortization, and accretion. Adjusted EBITDA
excludes the unrealized gain or loss related to our derivative contracts, loss
on extinguishment of debt, and a litigation accrual. We believe the
presentation of EBITDA and Adjusted EBITDA provide useful information
regarding our ability to service debt and to fund capital expenditures and
help our investors understand our operating performance and make it easier to
compare our results with those of other companies that have different
financing, capital and tax structures. We believe this presentation is
relevant and useful because it helps our investors understand our operating
performance and make it easier to compare our results with those of other
companies that have different financing, capital and tax structures. EBITDA
and Adjusted EBITDA should not be considered in isolation from or as a
substitute for net income, as an indication of operating performance or cash
flows from operating activities or as a measure of liquidity. EBITDA and
Adjusted EBITDA, as we calculate them, may not be comparable to EBITDA and
Adjusted EBITDA measures reported by other companies. In addition, EBITDA and
Adjusted EBITDA do not represent funds available for discretionary use.

The following table presents a reconciliation of our consolidated net income
to consolidated EBITDA and Adjusted EBITDA.

                                 Three Months Ended     Nine Months Ended
                                 September 30,          September 30,
                                 2012       2011        2012       2011
                                 (In thousands)
                                 (Unaudited)
Net income (loss)               $ (1,471)  $ 52,928    $ 55,315   $ 126,752
Income tax expense (benefit)      (2,175)    28,822      33,959     68,841
Net interest expense              11,406     11,552      33,500     30,237
Depreciation, depletion,           77,462     84,455      251,894    241,917
amortization and accretion
EBITDA                             85,222     177,757     374,668    467,747
Adjustments:
Unrealized commodity derivative    23,784     (18,240)    7,461      (20,054)
(gain) loss
Loss on extinguishment of debt     -          2,031       -          22,694
Litigation accrual                700        -           9,000      -
Adjusted EBITDA                  $ 109,706  $ 161,548   $ 391,129  $ 470,387
Adjusted EBITDA Margin             59%        66%         61%        66%

CONTACT: Mark Brewer                      Danny Gibbons
         Investor Relations               SVP & CFO
         investorrelations@wtoffshore.com investorrelations@wtoffshore.com
         713-297-8024                     713-624-7326

SOURCE W&T Offshore, Inc.

Website: http://www.wtoffshore.com
 
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