W&T Offshore Reports Fourth Quarter And Full-Year 2012 Financial Results, Operations Update And Year End Proved Reserves

  W&T Offshore Reports Fourth Quarter And Full-Year 2012 Financial Results,
                Operations Update And Year End Proved Reserves

PR Newswire

HOUSTON, Feb. 26, 2013

HOUSTON, Feb. 26, 2013 /PRNewswire/ -- W&T Offshore, Inc. (NYSE: WTI) today
announces financial and operational results for the fourth quarter and full
year 2012, along with an operations update and year end proved reserves. Some
of the highlights include:

  oIncrease in proved reserves in 2012 over 2011. Proved reserves as of
    December 31, 2012 were 117.5 million barrels of oil equivalent ("MMBoe"),
    or 705.1 billion cubic feet equivalent ("Bcfe") of natural gas, with 47%
    crude oil, 13% natural gas liquids ("NGLs"), and 40% natural gas.
    Converted 50% of 2011 proved undeveloped reserves to proved developed.
    Proved developed crude oil reserves increased 51% over the prior year.
  oPV-10 value^(1) of proved reserves at year end was $2.8 billion, with
    proved developed producing reserves accounting for approximately $1.7
    billion. Year-end proved reserves do not include potential additions from
    pending results in the East Texas Star Prospect or the recent Big Bend
    discovery at Mississippi Canyon ("MC") 698.
  oFor the fourth quarter of 2012, production volumes averaged 49,007 Boe per
    day, or 294.0 MMcf of natural gas equivalent per day. Production volumes
    were split 37% oil, 12% NGLs and 51% natural gas. Average realized sales
    price was $100.31 per barrel for oil, $36.16 per barrel for NGLs and $3.58
    per Mcf for natural gas.
  oDrilled four and completed three horizontal wells in the West Texas
    Permian Basin. Current production from the Yellow Rose field is 5,150 Boe
    per day gross, up over 100% from year ago levels.
  oAnnounced discovery at Mississippi Canyon block 698 Big Bend deepwater
    exploration well, which reached total depth in mid-November 2012 and
    logged over 150 feet of high quality oil pay in two Miocene reservoirs.
  oDuring the fourth quarter we completed 23 wells, including one well
    offshore in the Gulf of Mexico, two horizontal wells at our Star Prospect
    in East Texas, and 20 wells (three horizontal and 17 vertical) in the
    Permian Basin of West Texas.
  oRevenues for the fourth quarter were $237.1 million, with 2012 full year
    revenues of $874.5 million.
  oNet income and earnings per share for the fourth quarter and full year of
    2012, excluding special items, were $19.7 million and $0.26 per share, and
    $88.4 million and $1.17 per share, respectively.
  oAdjusted EBITDA for the fourth quarter was $151.2 million and our adjusted
    EBITDA margin was 64%. For the full year, adjusted EBITDA was $542.3
    million and the adjusted EBITDA margin was 62%. Net cash provided by
    operating activities for 2012 was $385.1 million. Capital expenditures
    and other investing activities for 2012 were $657.4 million, and we
    distributed $82.8 million in dividends on our common stock for the year.
    Dividends included our normal dividend of $0.08 per share per quarter and
    two special dividends.

Tracy W. Krohn, W&T Offshore's Chairman and Chief Executive Officer, stated,
"In 2012 we successfully executed our capital plan, which was heavily weighted
towards development and complemented with exploration projects to drive
organic growth in 2013. We converted 50% of our 2011 proved undeveloped
reserves to a proved developed status and increased our proved developed crude
oil reserves by 51% in 2012. This allowed us to continue to take advantage of
the on-going strength in oil prices and the premium we receive for our Gulf
Coast production. Additionally, our high value reserves provide a cushion
from potential ceiling test impairment issues.

"Our success at our Yellow Rose project in West Texas contributed to the
addition of proved oil reserves in 2012. As we recently announced, due to the
favorable initial results of our horizontal exploration wells, which tested
the Wolfcamp formation, and the success of our down-spacing program to 40
acres on our vertical Wolfberry wells, we added significant proved oil
reserves. We are proceeding with an active drilling and development program
and have seven horizontal Wolfcamp wells and 20 vertical wells currently
planned for 2013. We believe that our Yellow Rose project has the potential
for a significant number of additional horizontal locations to develop crude
oil from the Wolfcamp formation and possibly other formations beyond 2013.

"Some of our other 2012 exploration activities were executed in the latter
part of the year with encouraging results. Our Star Prospect in East Texas is
progressing well and we had encouraging results there from our fourth
horizontal well. We are moving forward with plans to drill one or more
additional exploration wells in our Star Prospect in 2013. No reserves were
booked at year end 2012 for our Star Prospect. In 2013, our capital budget
will be heavily focused on exploration activities both onshore and offshore to
drive organic growth, which in turn will allow us to accentuate these
activities with acquisitions. This provides greater flexibility in our growth
strategy and will make us less reliant on acquisitions for expansion.

"Our acquisition activity in 2012 was extremely active in regards to the
opportunities that we examined, but resulted in only one acquisition as we
maintained the discipline to adhere to our acquisition criteria. However,
that acquisition included 65 deepwater blocks that hold enormous upside with
future drilling and joint venture opportunities. While we will continue to
actively look for strategic acquisition opportunities that have upside, we
have developed an inventory of exploration and development projects to provide
solid reserve and production growth potential through the drill bit.

"Our $450 million capital budget for 2013, provides for organic growth and
directs 63% of our capital to exploration drilling in 2013. Our enhanced
exploration team working alongside our development group has created a
portfolio of projects that are designed to better balance our high cash flow
in our offshore projects with onshore reserves that have a longer reserve life
and allow for reserves to be booked more quickly. We are pleased with the
progress we are making to expand our operations onshore and to diversify our
growth opportunities, and we believe that 2013 will be another solid year for
W&T," concluded Mr. Krohn.

Production, Revenues and Price: Production volumes for 2012 were higher than
2011, but came in lower than initial expectations due to tropical storm
activity, significant third-party pipeline outages during the third and fourth
quarter of 2012, as well as the sanding up of the MC 243 A-2 well shortly
after Hurricane Isaac.

Revenues for the fourth quarter of 2012 were $237.1 million compared to $261.9
million in the fourth quarter of 2011. During the fourth quarter of 2012, we
sold 1.7 million barrels of oil, 0.5 million barrels of NGLs and 13.7 Bcf of
natural gas as compared to 1.6 million barrels of oil, 0.6 million barrels of
NGLs and 14.4 Bcf of natural gas for the same period of 2011. In total, we
sold 4.5 million Boe at an unhedged average realized sales price of $52.51 per
Boe compared to 4.6 million Boe sold at an unhedged average realized sales
price of $57.12 per Boe in the fourth quarter of 2011.

For the full year 2012, revenues were $874.5 million compared to $971.0
million for 2011. Revenues were lower in 2012 compared to 2011 solely as a
result of lower commodity prices, slightly offset by a rise in production
volumes. We sold 6.0 million barrels of oil, 2.1 million barrels of NGLs, and
53.8 Bcf of natural gas for the full year 2012 as compared to 6.1 million
barrels of oil, 1.9 million barrels of NGLs, and 53.7 Bcf of natural gas for
the full year 2011. Total sales for 2012 were 17.1 million Boe and our
unhedged average realized sales price was $50.93 per Boe. Total sales for
2011 were 16.9 million Boe and our unhedged average realized sales price was
$57.32 per Boe.

Net Income & EPS: Our operating results for the fourth quarter of 2012
resulted in net income of $16.7 million, or $0.21 per common share, compared
to net income of $46.1 million, or $0.61 per common share for the same period
in 2011. Net income for the fourth quarter of 2012, excluding special items,
was $19.7 million, or $0.26 per common share. This compares to $50.1 million,
or $0.67 per common share, reported for the fourth 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 " at the back of this press release.  Adjusted EBITDA for
the full year 2012 was $542.3 million, compared to $646.5 million for 2011.
Our Adjusted EBITDA margin was 62% for 2012 compared to 67% in 2011. Adjusted
EBITDA and Adjusted EBITDA margin were lower in 2012 primarily due to lower
average realized sales prices. Net cash provided by operating activities for
2012 was $385.1 million compared to $521.5 million for the same period of the
prior year.

Lease Operating Expenses ("LOE"): For the fourth quarter of 2012, LOE, which
includes base lease operating expenses, insurance, workovers, facilities
expenses, and hurricane remediation costs net of insurance claims, was $61.9
million compared to $59.3 million in the fourth quarter of 2011. Base LOE
increased $1.5 million in the quarter due to the acquisition of the properties
from Newfield and the expanding well count at our Yellow Rose field, partially
offset by higher processing fees received offshore and decreased transition
service fees for an acquisition completed in 2011. Workover expenses were up
$2.7 million due toa greater number ofworkovers (as a result of a greater
number of wells) at our Yellow Rose field while facilities expenses were lower
by $2.6 million as the 2011 period included transition service costs incurred
on our Fairway field. Hurricane repairs were up $1.0 million for costs
related to Hurricane Isaac.

For the full year 2012, LOE was $232.3 million compared to $219.2 million for
2011. Base lease operating expense rose by $10.3 million, workovers were up
$6.8 million, facilities expenses were down $4.9 million, and hurricane repair
expenses were up $0.9 million all when compared to 2011 full year numbers.
The increase in base lease operating expense was primarily attributable to
new properties acquired during 2011 and 2012. Increases in workovers were
driven mainly by onshore operations reflecting a full year of operations in
2012 (and more wells in the field) versus a partial year in 2011. Facilities
expense was lower due to 2011 reflecting work on several offshore facilities
that did not reoccur in 2012.

Depreciation, depletion, amortization and accretion ("DD&A"): DD&A for the
fourth quarter of 2012 was $104.3 million as compared to $86.9 million for the
fourth quarter of 2011. For the full year 2012, DD&A was $356.2 million, up
$27.4 million over full year 2011. The increase in DD&A was due in part to
costs capitalized to the full cost pool from both the unevaluated pool and
from increases in our ARO estimates. In addition, we incurred significant
development capital expenditures throughout the year that converted proved
undeveloped reserves into proved developed producing reserves, but did not
lead to an overall increase in proved reserves. Finally, most of our reserve
additions for 2012 occurred late in the year which impacts the quarterly
nature of the DD&A calculation.

The Company has incurred $45.6 million and expects to incur an additional $5
million in costs related toremoval of wreck associated with platforms damaged
by Hurricane Ike in 2008. We believe that we have insurance coverage for
such amounts and future reimbursements will serve to reduce our full cost
pool, which will in turn reduce our DD&A rate and replenish our $50.6 million
in cash expenditures.

Capital Expenditures Update: Our total capital expenditures for 2012 of
$684.9 million, comprised of $479.3 million for oil and gas expenditures and
$205.6 million for acquisitions. Capital expenditures exceeded our initial
budget for 2012 as we were able to drill wells faster onshore than what we
originally anticipated. Capital expenditures for oil and gas properties
consisted of $137.1 million for exploration activities, $310.2 million for
development activities, and $32.0 million for seismic, leasehold, and other
costs. Acquisition costs were limited to the $205.6 million paid to acquire
certain oil and gas leasehold interests from Newfield Exploration on October
5, 2012. The acquisition was composed of 78 federal offshore lease blocks in
the Gulf of Mexico totaling approximately 432,700 gross acres. The acreage is
comprised of 65 blocks in the deepwater, six of which are producing, ten
blocks on the conventional shelf, four of which are producing, and an
overriding royalty interest in three deepwater blocks, two of which are
producing. Internal estimates of proved reserves associated with the Newfield
Properties as of the acquisition date were approximately 7.0MMBoe (42.0
Bcfe), comprised of approximately 61% natural gas, 36% oil and 3% NGLs, all of
which were classified as proved developed. The acquisition was funded from
cash on hand and our revolving bank credit facility. 

In November 2012, the borrowing base for our revolving bank credit facility
was increased to $725 million from the previous level of $575 million.

2013 Capital Expenditure Budget:  In a news release on February 12, 2013, we
announced our 2013 capital budget of $450 million and provided details of
certain 2013 drilling projects. As reported, approximately 63% of the $450
million budget is expected to be for exploratory drilling to drive organic
growth of both reserves and production, with the remaining 37% directed to
oil-focused development activities. We anticipate allocating 63% of the 2013
budget to projects in the Gulf of Mexico, both on the shelf and in the
deepwater, and 37% to projects onshore in Texas.

Operations Update:

Below is additional information supplementing the detailed operations update
provided on February 12, 2013.

At our East Texas Star Project, our fourth horizontal well, McMahon A 28 #1H,
was fracture stimulated and placed on flowback during late December. The
results so far are encouraging and are in line with our expectations for the
well. Prior to committing to a long term development plan, we are planning to
drill at least one or more additional wells this year.

At our Yellow Rose Properties, current production is averaging approximately
4,840 Boe per day gross with a recent one day peak rate of 5,180 Boe per day.
Approximately 80% of our Yellow Rose lease acreage is held by production.
This is important as it will allow us to develop the field prudently and take
advantage of the best opportunities in the field.

In Terry County we completed two horizontal wells including the State Travis
Henson Unit #1H and the Holmes 23-4 Unit #1 H during the fourth quarter.
Based on a review of all of our well results in Terry County and full cycle
economics, we have decided not to pursue additional development of the area at
this time.

Year-End 2012 Proved Reserves increased over 2011: Proved reserves as of
December 31, 2012 were 117.5 MMBoe, or 705.1 Bcfe, with 47% crude oil, 13%
NGLs, and 40% natural gas, compared to proved reserves at December 31, 2011 of
116.9 MMBoe or 701.1 Bcfe, with 44% crude oil, 15% NGLs, and 41% natural gas.
The PV-10^(1) value of proved reserves at year-end 2012 was $2.8 billion,
excluding the effect of estimated asset retirement obligations ("ARO"),
compared to the same PV-10 measure at year-end 2011 of $3.1 billion.

The PV-10 value of our proved developed reserves at the end of 2012 increased
$462 million or 23% when compared to 2011. We replaced over 100% of our
production in 2012, whileproved developed oil reserves increased roughly
12millionbarrels in 2012 versus 2011. In addition to the benefit of
developing the previously booked PUDs, the Company has been able to classify
more of its onshore acreage as held by production.

Our proved reserves are summarized below.

               As of December 31, 2012
                                            Total Equivalent
                                            Reserves
Classification                     Natural  Oil         Natural     % of
of Proved      Oil       NGLs      Gas      Equivalent  Gas         total     PV-10
Reserves       (MMBbls)  (MMBbls)  (Bcf)    (MMBoe)     Equivalent  reserves  ^(1)(Millions)
                                                        (Bcfe)
Proved
developed      24.7      8.9       173.9    62.6        375.4       53%       $ 1,664
producing
Proved
developed      10.7      2.1       69.5     24.3        145.8       21%       777
non-producing
  Total proved 35.3      11.0      243.4    86.9        521.2       74%       2,441
  developed
Proved         19.5      4.2       41.6     30.6        183.9       26%       379
undeveloped
  Total proved 54.8      15.2      285.1    117.5       705.1       100%      $ 2,820

   In accordance with guidelines established by the SEC, our proved reserves
   as of December 31, 2012 were determined to be economically producible under
   existing economic conditions, which requires the use of the unweighted
   arithmetic average of the first-day-of-the-month price for oil and gas for
   the period January 2012 through December 2012. Also note that the present
   value of our total proved reserves only, discounted at 10% (referred to as
   "PV-10") is a non-GAAP financial measure. See "Non-GAAP Financial Measure"
1) below. For 2012, proved reserves and PV-10 were calculated using average
   prices of $98.13 per Bbl for oil, $1.13 per gallon for natural gas liquids
   and $2.77 per Mcf for natural gas, as adjusted for energy content for
   natural gas, quality, transportation fees and regional price
   differentials. The proved reserves and PV-10 for the 2011 period were
   calculated using average prices of $97.36 per Bbl for oil, $1.22 per gallon
   for natural gas liquids and $4.11 per Mcf for natural gas, as adjusted for
   energy content for natural gas, quality, transportation fees and regional
   price differentials.

Conference Call Information: W&T will hold a conference call to discuss our
financial and operational results on Wednesday, February 27, 2013, at 10:00
a.m. Eastern Time. To participate, dial (480) 629-9835 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
March 6, 2013, and may be accessed by calling (303) 590-3030 and using the
pass code 4590116#.

About W&T Offshore
W&T Offshore, Inc. is an independent oil and natural gas producer with
operations offshore in the Gulf of Mexico and onshore in both the Permian
Basin of West Texas and in East Texas. We have grown through acquisitions,
exploration and development and currently hold working interests in
approximately 72 offshore fields in federal and state waters (69 producing and
three fields capable of producing). W&T currently has under lease over 1.4
million gross acres including over 710,000 gross acres on the Gulf of Mexico
Shelf, over 480,000 gross acres in the deepwater and over 221,000 gross acres
onshore in Texas. 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.

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





W&T OFFSHORE, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Income (Loss)
(Unaudited)
                                 Three Months Ended     Twelve Months Ended
                                 December 31,           December 31,
                                 2012        2011       2012         2011
                                 (In thousands, except per share data)
Revenues^                       $ 237,146   $ 261,899  $ 874,491    $ 971,047
Operating costs and expenses:
Lease operating expenses         61,910      59,305     232,260      219,206
Gathering, transportation costs    5,404       5,809      20,718       21,195
and production taxes
Depreciation, depletion,           104,338     86,869     356,232      328,786
amortization and accretion
General and administrative         19,224      20,061     82,017       74,296
expenses
Derivative (gain) loss             (467)       8,919      13,954       (1,896)
Total costs and expenses           190,409     180,963    705,181      641,587
Operating income                   46,737      80,936     169,310      329,460
Interest expense:
Incurred                           19,859      15,480     63,268       52,393
Capitalized                        (3,375)     (3,223)    (13,274)     (9,877)
Loss on extinguishment of debt     -           -          -            22,694
Other income                       5           62         215          84
Income before income tax           30,258      68,741     119,531      264,334
expense
Income tax expense                13,588      22,676     47,547       91,517
Net income                      $ 16,670    $ 46,065   $ 71,984     $ 172,817
Basic and diluted earnings per   $ 0.21      $ 0.61     $ 0.95       $ 2.29
common share
Weighted average common shares     74,470      74,079     74,354       74,033
outstanding
Consolidated Cash Flow
Information
Net cash provided by operating   $ 33,648    $ 125,427  $ 385,137    $ 521,478
activities
Capital expenditures and           372,491     99,222     684,863      719,026
acquisitions





W&T OFFSHORE, INC. AND SUBSIDIARIES
Condensed Operating Data
(Unaudited)
                                    Three Months Ended   Twelve Months Ended
                                    December 31,         December 31,
                                    2012       2011      2012        2011
Net sales volumes:
Oil (MBbls)                         1,672      1,578     6,033       6,073
NGL (MBbls)                          549        613       2,129       1,892
Oil and NGLs (MBbls)                  2,221      2,191     8,163       7,964
Natural gas (MMcf)                   13,728     14,359    53,825      53,743
Total oil and natural gas             4,509      4,584     17,133      16,921
(MBoe)^(1)
Total oil and natural gas             27,052     27,502    102,800     101,528
(MMcfe)^(1)
Average daily equivalent sales        49.0       49.8      46.8        46.4
(MBoe/d)
Average daily equivalent sales        294.0      298.9     280.9       278.2
(MMcfe/d)
Average realized sales prices
(Unhedged):
Oil ($/Bbl)                         $ 100.31   $ 112.01  $ 104.35    $ 105.92
NGLs ($/Bbl)                          36.16      56.55     39.75       55.81
Oil and NGLs ($/Bbl)                  84.46      96.49     87.50       94.02
Natural gas ($/Mcf)                   3.58       3.51      2.94        4.12
Barrel of oil equivalent ($/Boe)      52.51      57.12     50.93       57.32
Natural gas equivalent ($/Mcfe)       8.75       9.52      8.49        9.55
Average realized sales prices
(Hedged):^(2)
Oil ($/Bbl)                         $ 99.89    $ 111.61  $ 103.08    $ 104.30
NGLs ($/Bbl)                          36.16      56.55     39.75       55.81
Oil and NGLs ($/Bbl)                  84.14      96.20     86.56       92.78
Natural gas ($/Mcf)                   3.58       3.51      2.94        4.12
Barrel of oil equivalent ($/Boe)      52.36      56.98     50.48       56.74
Natural gas equivalent ($/Mcfe)       8.73       9.50      8.41        9.46
Average per Boe ($/Boe):
Lease operating expenses           $ 13.73    $ 12.94   $ 13.56     $ 12.95
Gathering and transportation costs    1.20       1.27      1.21        1.25
and production taxes
Depreciation, depletion,              23.14      18.95     20.79       19.43
amortization and accretion
General and administrative            4.26       4.38      4.79        4.39
expenses
Net cash provided by operating        7.46       27.36     22.48       30.82
activities
Adjusted EBITDA                       33.53      38.42     31.65       38.20
Average per Mcfe ($/Mcfe):
Lease operating expenses           $ 2.29     $ 2.16    $ 2.26      $ 2.16
Gathering and transportation costs    0.20       0.21      0.20        0.21
and production taxes
Depreciation, depletion,              3.86       3.16      3.47        3.24
amortization and accretion
General and administrative            0.71       0.73      0.80        0.73
expenses
Net cash provided by operating        1.24       4.56      3.75        5.14
activities
Adjusted EBITDA                       5.59       6.40      5.28        6.37

    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)
                                                   December 31,   December 31,
                                                   2012           2011
                                                   (In thousands, except
                                                   share data)
Assets
Current assets:
Cash and cash equivalents                          $  12,245      $  4,512
Receivables:
 Oil and natural gas sales                          97,733         98,550
 Joint interest and other                           56,439         25,804
 Income taxes                                       47,884         -
 Total receivables                               202,056        124,354
Deferred income taxes                                 267            2,007
Prepaid expenses and other assets                     25,555         30,315
Total current assets                                  240,123        161,188
Property and equipment – at cost:
Oil and natural gas properties and equipment
(full cost method, of which $123,503 atDecember      6,694,510      5,959,016
31, 2012 and $154,516 at December 31, 2011 were
excluded fromamortization)
Furniture, fixtures and other                         21,786         19,500
Total property and equipment                          6,716,296      5,978,516
Less accumulated depreciation, depletion and          4,655,841      4,320,410
amortization
Net property and equipment                            2,060,455      1,658,106
Restricted deposits for asset retirement              28,466         33,462
obligations
Other assets                                          19,943         16,169
Total assets                                       $  2,348,987   $  1,868,925
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable                                   $  123,885     $  75,871
Undistributed oil and natural gas proceeds            37,073         33,732
Asset retirement obligations                         92,630         138,185
Accrued liabilities                                   20,755         29,705
Income taxes                                         266            10,392
Total current liabilities                             274,609        287,885
Long-term debt                                        1,087,611      717,000
Asset retirement obligations, less current            291,423        255,695
portion
Deferred income taxes                                 145,249        58,881
Other liabilities                                     8,908          4,890
Commitments and contingencies                         -              -
Shareholders' equity:
Common stock, $0.00001 par value; 118,330,000
shares authorized; 78,118,803 issued and
75,249,630 outstanding at December 31, 2012;
77,220,706 issued and74,351,533 outstanding at       1              1
December 31, 2011
Additional paid-in capital                            396,186        386,920
Retained earnings                                     169,167        181,820
Treasury stock, at cost                               (24,167)       (24,167)
Total shareholders' equity                            541,187        544,574
Total liabilities and shareholders' equity         $  2,348,987   $  1,868,925







W&T OFFSHORE, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(Unaudited)
                                                     Twelve Months Ended
                                                     December 31,
                                                     2012          2011
                                                     (In thousands)
Operating activities:
Net income                                          $ 71,984      $ 172,817
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation, depletion, amortization and              356,232       328,786
accretion
Amortization of debt issuance costs                  2,575         2,010
Loss on extinguishment of debt                        -             22,694
Share-based compensation                             12,398        9,710
Derivative (gain) loss                               13,954        (1,896)
Cash payments on derivative settlements              (7,664)       (9,873)
Deferred income taxes                                88,109        61,835
Asset retirement obligation settlements              (112,827)     (59,958)
Changes in operating assets and liabilities           (39,624)      (4,647)
Net cash provided by operating activities             385,137       521,478
Investing activities:
Acquisitions of property interests in oil and          (205,550)     (437,247)
natural gas properties
Investment in oil and natural gas properties and       (479,313)     (281,779)
equipment
Proceeds from sales of oil and natural gas             30,453        15
properties and equipment
Purchases of furniture, fixtures and other            (3,031)       (3,660)
Net cash used in investing activities                 (657,441)     (722,671)
Financing activities:
Issuance of Senior Notes                              318,000       600,000
Repurchase of Senior Notes                            -             (450,000)
Borrowings of long-term debt                          732,000       623,000
Repayments of long-term debt                          (679,000)     (506,000)
Dividends to shareholders                             (82,832)      (58,756)
Repurchase premium and debt issuance costs             (8,510)       (32,288)
Other                                                  379           1,094
Net cash provided by financing activities             280,037       177,050
Increase (decrease) in cash and cash equivalents      7,733         (24,143)
Cash and cash equivalents, beginning of period        4,512         28,655
Cash and cash equivalents, end of period            $ 12,245      $ 4,512



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, litigation accruals, 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              Twelve Months Ended
                     December 31,                    December 31,
                     2012            2011            2012           2011
                     (In thousands, except per share amounts)
                     (Unaudited)
Net income          $  16,670       $  46,065       $  71,984      $ 172,817
Unrealized
commodity               (1,172)         8,284           6,289         (11,770)
derivative (gain)
loss
Loss on
extinguishment of       -               -               -             22,694
debt
Litigation              1,250           -               10,250        -
accruals
Income tax
adjustment to           2,971           (4,283)         (78)          (4,823)
statutory rate
Net income
excluding special    $  19,719       $  50,066       $  88,445      $ 178,918
items
Basic and diluted
earnings per
common share,        $  0.26         $  0.67         $  1.17        $ 2.37
excluding 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 litigation accruals. 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      Twelve Months Ended
                               December 31,            December 31,
                               2012        2011        2012        2011
                               (In thousands)
                               (Unaudited)
Net income                    $ 16,670    $ 46,065    $ 71,984    $ 172,817
Income tax expense              13,588      22,676      47,547      91,517
Net interest expense            16,479      12,195      49,979      42,432
Depreciation, depletion,         104,338     86,869      356,232     328,786
amortization and accretion
EBITDA                           151,075     167,805     525,742     635,552
Adjustments:
Unrealized commodity             (1,172)     8,284       6,289       (11,770)
derivative (gain) loss
Loss on extinguishment of        -           -           -           22,694
debt
Litigation accruals             1,250       -           10,250      -
Adjusted EBITDA                $ 151,153   $ 176,089   $ 542,281   $ 646,476
Adjusted EBITDA Margin           64%         67%         62%         67%





SOURCE W&T Offshore, Inc.

Website: http://www.wtoffshore.com
 
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