W&T Offshore Reports First Quarter 2013 Financial And Operational Results

  W&T Offshore Reports First Quarter 2013 Financial And Operational Results

PR Newswire

HOUSTON, May 7, 2013

HOUSTON, May 7, 2013 /PRNewswire/ --W&T Offshore, Inc. (NYSE: WTI) today
announced financial and operational results for the first quarter of 2013.
Some of the first quarter highlights include: 

  oProduction volumes averaged 50.0 MBoe per day, or 299.9 MMcfe of natural
    gas per day. Oil production for the first quarter of 2013 increased 20%
    over the first quarter of 2012 due to higher production at Ship Shoal 349
    "Mahogany" and onshore West Texas.
  oProduction volumes were split 41% oil, 12% NGLs and 47% natural gas.
    Average realized sales price was $107.15 per barrel for oil, $34.25 per
    barrel for NGLs and $3.38 per Mcf for natural gas.
  oRevenues were $259.2 million and net income and earnings per share were
    $26.6 million and $0.35 per share, respectively.
  oAdjusted EBITDA was $168.3 million, up $21.8 million over the first
    quarter last year and Adjusted EBITDA Margin was 65%, up from 62% in the
    first quarter last year. Net cash provided by operating activities was
    $169.8 million, up from $128.2 million, due to better operating results.
  oCompleted 15 wells, including one well offshore in the Gulf of Mexico and
    14 wells (three horizontal and 11 vertical) in the Permian Basin of West
    Texas.
  oWe paid a dividend of $0.08 per share during the quarter. In May 2013, we
    increased the quarterly dividend to $0.09 per share.
  oOn April 19, the borrowing base for our revolving bank credit facility was
    increased to $800 million from $725 million.

Tracy W. Krohn, W&T Offshore's Chairman and Chief Executive Officer, stated,
"Our results for the first quarter reflect the success of our strong
development drilling program in 2012. Between the increases in our onshore
production and the contribution from our Mahogany drilling program, we saw a
20% growth in oil production compared to the first quarter of 2012. Our net
cash provided by operating activities was up 33% to $169.8 million. Strong
cash flow continues to fund our exploratory and development drilling programs
and drive organic growth. The recent increase in our borrowing base to $800
million, up from $725 million, further improves our liquidity and provides us
with significant capital to take on new opportunities or pursue acquisitions
as we find opportunities that meet our criteria."

Revenues, Production, and Price: Revenues for the first quarter were $259.2
million compared to $235.9 million in the first quarter of 2012. During the
first quarter of 2013, we sold 1.8 million barrels of oil, 0.5 million barrels
of NGLs and 12.7 Bcf of natural gas as compared to 1.5 million barrels of oil,
0.5 million barrels of NGLs and 14.4 Bcf of natural gas for the same period of
2012. In total, we sold 4.5 million Boe at an average realized sales price of
$57.53 per Boe compared to 4.5 million Boe sold at an average realized sales
price of $52.41 per Boe in the first quarter of 2012. Revenues from oil and
liquids as a percent of our total revenues were approximately the same, 83.3%
for the first quarter of 2013 compared to 83.2% for the prior year period.

Net Income & EPS: Our operating results for the first quarter of 2013
resulted in net income of $26.6 million, or $0.35 per common share, compared
to net income of $3.2 million, or $0.04 per common share for the same period
in 2012. Net income for the first quarter of 2013, adjusted to exclude
special items was $26.4 million, or $0.35 per common share. This compares to
$30.8 million, or $0.40 per common share reported for the first quarter of
2012, 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
first quarter of 2013 was $168.3 million, compared to $146.5 million for the
same period in 2012. Our Adjusted EBITDA Margin in the first quarter of 2013
was 65% compared to 62% for the same period in 2012. Net cash provided by
operating activities for the first quarter of 2013 was $169.8 million compared
to $128.2 million for the same period of the prior year. We expect to receive
a $42 million tax refund from the U.S. Treasury in connection with tax net
operating loss carrybacks to 2010 and 2011 sometime during the third quarter
of 2013.

As previously disclosed in our fourth quarter 2012 earnings release, we have
already incurred $49.7 million, and we expect to incur an additional $0.7
million in costs related toremoval of wreckage associated with platforms
damaged by Hurricane Ike in 2008.As part of our litigation claim against our
excess insurance underwriters, we have filed a motion for summary judgment,
which if successful, would result in the reimbursement of the costs incurred
once all claims are filed.

Lease Operating Expenses ("LOE"): For the first quarter of 2013, LOE, which
includes base lease operating expenses, insurance, workovers, facilities
expenses, and hurricane remediation costs net of insurance claims, was $59.3
million compared to $56.7 million in the first quarter of 2012. On a
component basis, facilities expense increased $3.3 million, base lease
operating expenses increased $0.6 million, and hurricane remediation costs net
of insurance claims increased $0.2 million, while workover expense decreased
$1.5 million.

Depreciation, depletion, amortization and accretion ("DD&A"): DD&A for the
first quarter of 2013 was $108.9 million compared to $88.5 million for the
first quarter of 2012. DD&A increased primarily due to investments made in
2012 in proved undeveloped properties and the Newfield properties acquired in
2012. 

General and administrative expenses ("G&A"): G&A decreased to $21.1 million
for the first quarter of 2013 from $29.5 million for the prior year period
primarily because the first quarter of 2012 included an $8.3 million
litigation accrual that did not recur in the 2013 period.

Interest expense: Interest expense incurred increased to $21.2 million for
the first quarter of 2013 from $13.9 million for the prior year period. The
aggregate principle amount of our 8.5% Senior Notes outstanding was $900.0
million in the first quarter of 2013 compared to $600.0 million in the prior
year period due to the issuance of an additional $300.0 million principle
amount of our 8.5% Senior Notes during October 2012. During the first quarter
of 2013 and 2012, $2.4 million and $3.2 million, respectively, of interest was
capitalized to unevaluated oil and natural gas properties. The decrease is
primarily attributable to reclassifying unevaluated properties to the full
cost pool during the fourth quarter of 2012.

Derivative Schedule: We have posted an update to our commodity derivatives
schedule in the investor relations section of our website at
http://www.wtoffshore.com/.

Capital Expenditures: Our capital expenditures for the first quarter of 2013
were $136.6 million, of which 63% was dedicated to offshore activities and 37%
to onshore activities. The capital expenditures for the quarter were
comprised of $60.6 million for exploration activities, $73.7 million for
development activities, and $2.3 million for seismic, leasehold, and other
costs.  

In April, the borrowing base for our revolving bank credit facility was
increased to $800 million from the previous level of $725 million.

Operations Review and Update

OFFSHORE

Wells Completed in the First Quarter 2013
   Block/Well     WI%    Type  Location   Target            Comments
                                                            Completed Jan 3,
                                                            discovered 2nd
                                                            pay zone adding
   SS 349 A-9     100    DEV   Shelf      Oil in P sand at  to proved
   (Mahogany)                             ~14,300'          reserves. 1st
                                                            production - Jan
                                                            2013. IP rate:
                                                            ~2,700 Boepd net.
Current Drilling Activity in the First Quarter 2013
   Block/Well     WI%    Type  Location   Target            Comments*
                                                            Well is at TD and
                                                            is being logged.
                                                            Est. 1st
                                          Gas and liquids   production -
   MP 108 B-1     100    EXPL  Shelf      in Tex W 6 sand   mid-2013. Target
                                          at ~14,000' TVD   IP - ~1,200 Boepd
                                                            net. Targeted
                                                            reserves - 1.8
                                                            MMBoe.
                                                            Currently
                                          Proved oil        completing the
   MC 243 A-2 ST                          reserves in the   well. Est. 1st
   (Matterhorn)   100    DEV   Deepwater  A sand at         production - Q2
                                          ~6,800' TVD       2013. Target IP -
                                                            500 to 1,000
                                                            Boepd net.
                                                            Well at
                                                            intermediate
                                                            casing point
                                                            depth of 16,425'.
                                                            Est. 1st
                                          Oil at ~17,200'   production -
                                          TVD in the T2     mid-2013. Target
                                          sand              IP - 2,000 Boepd
                                          (exploration      net. Targeted
   SS 349 A-14    100    EXPL  Shelf      target).          reserves - 3.1
   (Mahogany)                             Secondary target  MMBoe (T-Sand
                                          in the P sand     only). Well has
                                          (development) at  logged ~123' of
                                          ~14,200' TVD      pay in the P-Sand
                                                            and encountered
                                                            more than 100' of
                                                            additional
                                                            hydrocarbon
                                                            interval above
                                                            the P-sand.
                                                            Currently at
                                          Low risk gas and  9,619' MD. Est.
   HI 21 A-1      100    DEV   Shelf      liquids ~12,500'  1st production -
                                          in the LH-20      Q3 2013. Target
                                          sands             IP - ~1,500 Boepd
                                                            net.
Upcoming Drilling Activity in 2013
   Block/Well     WI%    Type  Location   Target            Comments*
                                                            Projected spud
                                                            date - Q3 2013.
                                                            Est 1st
   MP 108 B-2     100    EXPL  Shelf      Gas and liquids   production - Q4
                                          in Tex W 6 sand   2013. Target IP -
                                                            ~1,200 Boepd net.
                                                            Targeted reserves
                                                            - 1.7 MMBoe.
                                          Water injection   Projected spud
   MC 243 A-5     100    EXPL  Deepwater  well for          date - late May.
   (Matterhorn)                           increased         Est. project
                                          reserves (oil)    online - Q3 2013.
                                                            Projected spud
                                          Multiple          date - Q3 2013.
                                          exploratory       Est. 1st
   SS 349 A-15    100    EXPL  Shelf      targets (N, O,    production - Q1
   (Mahogany)                             P, Q, Q5 sands)   2014. Target IP -
                                          at 13,000' to     ~1,500 Boepd net.
                                          15,500' TVD       Targeted reserves
                                                            - 4 to 5 MMBoe.
   *Targeted reserves - represents the "net" potential resource addition as
   calculated on an unrisked Swanson's mean basis.

OFFSHORE EXPLORATION AND DEVELOPMENT
During the first quarter of 2013 we were active with four rigs running in the
Gulf of Mexico. Two of those rigs were drilling exploratory targets at our
Ship Shoal 349 "Mahogany" field and at our Main Pass 108 field. The other two
rigs were targeting development projects at our Mississippi Canyon 243
"Matterhorn" field and our High Island 22 field. All four wells have made
significant progress and we expect to finish the completions in the next few
months.

Mahogany Field
At our Ship Shoal 349 "Mahogany" field, the A-14 exploratory well is at
intermediate casing point and will be soon approaching the exploratory target
T-Sand around 18,000' measured depth. The well has drilled through the field
pay P-Sand, encountering approximately 123 feet of measured depth pay,
slightly thicker than originally projected. In addition to the P-Sand pay,
the well encountered over 100 feet of hydrocarbon interval in three additional
sands above the P-Sand, which is expected to add to the overall value of the
project. We expect to reach total depth near the end of the second quarter.

Following the completion of the A-14 well, we plan to perform a recompletion
on the A-4 well and then will proceed to drill the A-15 well. The A-15 should
spud sometime during the third quarter and is targeted to reach total depth
near the end of the year. This exploratory opportunity currently targets five
separate pay sands.

Main Pass 108 Field
At our Main Pass 108 field, we have a rig on location and we just reached
total depth of our B-1 well. We encountered our objective sand, the Tex W-6,
and are in the process of logging the well. The initial results are
encouraging. This exploratory well targeting approximately 1.8 MMBoe net in
potential reserve additions should be completed and on production by July.
The rig will then skid over to spud the Main Pass 108 B-2 well. The B-2 is
very similar to the B-1 in targeted reserves. We expect that the B-2 well, if
successful, could be on first production by the fourth quarter of 2013.

Matterhorn Field
We are currently completing the Mississippi Canyon 243 A-2 side track, which
was a replacement for the well that sanded up in the early fourth quarter of
2012. The A-5 injection well, which is planned for later this year, is a
reservoir pressure maintenance project that is designed to extend the
productive life of the field as well as sweep oil to the A-2 well bore on the
eastern portion of the field. If the A-5 well is successful, we would look to
conduct a similar project in the western field area, focusing on a slightly
larger reserve target in 2014 or early 2015.

High Island 22 Field
Drilling continues to progress at our High Island 21 #1 well which is a
development well targeting the LH-20 sand. Our current project timeline has
the well reaching total depth near mid-2013 and production being brought
online during the third quarter of 2013. 

ONSHORE

Wells Completed in First Quarter 2013
   Project & Area    WI%    Type    # of       Target         Comments
                                    Wells
Permian Basin
                                                              1 Well
   Yellow Rose       100    DEV     2          Horizontal     producing, 1
   Horizontal                                  Wolfcamp       well on
                                                              flowback
                                                              1 Well
                                                              completed
                                               4,500'         awaiting
   Yellow Rose       100    DEV     9          vertical       hook-up, 5
   80 Acre Verticals                           section in the wells on
                                               Wolfberry      flowback, 3
                                                              wells on
                                                              production
                                               4,500'
   Yellow Rose       100    EXP     2          vertical       Wells on
   40 Acre Verticals                           section in the production
                                               Wolfberry
   Terry County      90     EXP     1          Horizontal     Completed, on
   Horizontal                                  Wolfcamp       flowback
Wells Completed in the Second Quarter 2013
   Project & Area    WI%    Type    # of       Target         Comments
                                    Wells
Permian Basin
   Yellow Rose       100    DEV     1          Horizontal     Well on
   Horizontal                                  Wolfcamp       flowback
                                               4,500'         Wells completed
   Yellow Rose       100    DEV     2          vertical       awaiting
   80 Acre Verticals                           section in the hook-up
                                               Wolfberry
                                               4,500'         Well completed
   Yellow Rose       100    EXP     1          vertical       awaiting
   40 Acre Verticals                           section in the hook-up
                                               Wolfberry
   Yellow Rose Horizontal Wells - Est. "all-in" well cost: $6 - $7 million,
   Avg days to drill: 39 days, Days to 1st production: 90 days, Est. gross
   expected ultimate recovery ("EUR"): ~300-450 Mboe, Est. initial production
   ("IP"): 350-400 Boepd gross (EURs and IP rates are oil plus wet gas, does
   not include NGL uptick), and all other costs attributable to well to
   achieve first production.
   Yellow Rose Vertical Wells - Est. "all-in" well cost: $2.0 - $2.3 million,
   Avg days to drill: 18 days, Days to 1st production: 60 days, Est. gross
   EUR: ~130 Mboe, Est. IP: 100 Boepd gross (EURs and IP rates are oil plus
   wet gas, does not include NGL uptick), and all other costs attributable to
   well to achieve first production.

ONSHORE EXPLORATION AND DEVELOPMENT

Yellow Rose Project
We are continuing our current two rig drilling program at Yellow Rose and have
completed 14 wells (three horizontal wells and 11 vertical wells) during the
first quarter. Four additional wells have been completed since the end of the
quarter. Current production at Yellow Rose is approximately 3,775 net Boe per
day. The current production rates are being somewhat impacted by flaring due
to third party pipeline pressure issues, which we are working to resolve. Our
initial 40 acre down-spacing tests were successful and will lead to additional
reserve bookings and we could test 20 acre down-spacing later this year. We
also believe the field holds the potential for several hundred horizontal
wells between the upper Wolfcamp and additional benches. Our recent vertical
wells have seen notable improvement in the 30 day initial production rates
reflecting the favorable impact of our change in completion technique. We
have also seen an upward trend in the vertical EURs over the past few months
and are now projecting an average gross EUR of 130 MBoe (oil and unprocessed
gas).

Star Project
We continue to monitor our four initial wells that were drilled on our East
Texas acreage and have begun planning our fifth horizontal well. We expect
that the fifth well will be spud during the third quarter of 2013.

Recompletes and Workovers
During the first quarter, we completed four offshore recompletions and 15
onshore recompletions for a total cost of $9.4 million. The total impact was
a net initial production gain of 1,954 Boe per day. Workovers for the quarter
totaled $2.6 million and resulted in a net initial production increase of
1,412 Boe per day.

Outlook

Our guidance for the second quarter and full year 2013 is provided in the
table below and represents our best estimate of the range of likely future
results. Our full year guidance remains unchanged from our guidance provided
on February 12, 2013. Our results may be affected by the factors described
below in "Forward-Looking Statements."

                                              Second Quarter Full-Year
Estimated Production
                                              2013           2013
Oil and NGLs (MMBbls)                         2.1 – 2.3      8.1 – 9.0
Natural Gas (Bcf)                             11.8 – 13.1    52.9 – 58.5
Total (Bcfe)                                  24.3 – 26.8    102.0 – 112.0
Total (MMBoe)                                 4.0 – 4.5      17.0 – 18.7
Operating Expenses                            Second Quarter Full-Year

($ in millions)                               2013           2013
Lease operating expenses                      $70.4 - $77.8  $221 - $244
Gathering, transportation, & production taxes $7.7 - $8.5    $37 - $41
General & administrative                      $22.3 - $24.7  $78 - $86
Income tax rate ^(1)                          36%            36%

(1) For income statement purposes only and not a reflection of estimated tax
    payments or refunds in 2013.

Conference Call Information: We will hold a conference call to discuss these
financial and operational results on Wednesday, May 8, 2013, at 10:00 a.m.
Eastern Time. To participate, dial (480) 629-9819 a few minutes before the
call begins. The call will also be broadcast live over the Internet from our
website at www.wtoffshore.com. A replay of the conference call will be
available approximately two hours after the end of the call until May 15,
2013, and may be accessed by calling (303) 590-3030 and using the pass code
4615599#.

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 220,000 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, 2012
found at www.sec.gov or at our website at www.wtoffshore.com under the
Investor Relations section.

We may use the terms "potential reserves," "targeted reserves," "unrisked
anticipated recovery", "ultimate recovery" and "EUR" to describe estimates of
potentially recoverable hydrocarbons that the SEC rules strictly prohibit us
from including in filings with the SEC. These are our internal estimates of
hydrocarbon quantities that may be potentially discovered through exploratory
drilling or recovered with additional drilling or recovery techniques. These
quantities may not constitute "reserves" within the meaning of the Society of
Petroleum Engineer's Petroleum Resource Management System or SEC rules and do
not include any proved reserves unless the well was included in previously
disclosed proved undeveloped reserve estimates. EUR estimates and drilling
locations have not been risked by Company management except where indicated.
Actual locations drilled, and quantities that may be ultimately recovered from
our interests could differ substantially from our estimates and targets. We
make no commitment to drill all of the drilling locations which have been
attributed these quantities and our drilling plans are subject to revision.
Factors affecting ultimate recovery and reserve estimates and targets include
actual drilling results, including geological and mechanical factors affecting
recovery rates, which will vary from well to well; and the scope of our
ongoing drilling program, which will be directly affected by the availability
of capital, drilling and production costs, availability of drilling services
and equipment, drilling results, lease expirations, transportation
constraints, regulatory approvals and other factors.. Estimates of targeted
reserves, potential reserves and average well EUR may change significantly as
development of our oil and gas assets provide additional data.

Our production forecasts, estimated and targeted initial production rates and
expectations for future periods are similarly dependent upon many assumptions,
including estimates of production decline rates from existing wells and the
undertaking and outcome of future drilling activity, which may be affected by
significant commodity price declines or drilling cost increases. Actual
production will vary from well to well.



W&T OFFSHORE, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Income (Loss)
(Unaudited)
                                        Three Months Ended
                                        March 31,
                                        2013                    2012
                                        (In thousands, except per share data)
Revenues ^                              $    259,222            $   235,886
Operating costs and expenses:
Lease operating expenses                     59,341                 56,663
Gathering, transportation costs and          6,233                  5,706
production taxes
Depreciation, depletion, amortization        108,872                88,491
and accretion
General and administrative expenses          21,087                 29,479
Derivative loss                              3,368                  39,634
Total costs and expenses                     198,901                219,973
Operating income                             60,321                 15,913
Interest expense:
Incurred                                     21,234                 13,905
Capitalized                                  (2,433)                (3,191)
Income before income tax expense             41,520                 5,199
Income tax expense                           14,902                 1,981
Net income                              $    26,618             $   3,218
Basic and diluted earnings per common   $    0.35               $   0.04
share
Weighted average common shares               75,206                 74,300
outstanding
Consolidated Cash Flow Information
Net cash provided by operating          $    169,834            $   128,157
activities
Capital expenditures                         136,626                84,626

W&T OFFSHORE, INC. AND SUBSIDIARIES
Condensed Operating Data
(Unaudited)
                                                         Three Months Ended
                                                         March 31,
                                                         2013       2012
Net sales volumes:
Oil (MBbls)                                                1,844      1,540
NGL (MBbls)                                                535        544
Oil and NGLs (MBbls)                                       2,379      2,084
Natural gas (MMcf)                                         12,720     14,376
Total oil and natural gas (MBoe)^(1)                       4,499      4,480
Total oil and natural gas (MMcfe)^(1)                      26,993     26,877
Average daily equivalent sales (MBoe/d)                    50.0       49.2
Average daily equivalent sales (MMcfe/d)                   299.9      295.4
Average realized sales prices (Unhedged):
Oil ($/Bbl)                                              $ 107.15   $ 110.39
NGLs ($/Bbl)                                               34.25      48.51
Oil and NGLs ($/Bbl)                                       90.75      94.24
Natural gas ($/Mcf)                                        3.38       2.67
Barrel of oil equivalent ($/Boe)                           57.53      52.41
Natural gas equivalent ($/Mcfe)                            9.59       8.74
Average realized sales prices (Hedged):^(2)
Oil ($/Bbl)                                              $ 104.83   $ 106.63
NGLs ($/Bbl)                                               34.25      48.51
Oil and NGLs ($/Bbl)                                       88.96      91.46
Natural gas ($/Mcf)                                        3.38       2.67
Barrel of oil equivalent ($/Boe)                           56.58      51.12
Natural gas equivalent ($/Mcfe)                            9.43       8.52
Average per Boe ($/Boe):
Lease operating expenses                                 $ 13.19    $ 12.65
Gathering and transportation costs and production taxes    1.39       1.27
Depreciation, depletion, amortization and accretion        24.20      19.75
General and administrative expenses                        4.69       6.58
Net cash provided by operating activities                  37.75      28.61
Adjusted EBITDA                                            37.41      32.71
Average per Mcfe ($/Mcfe):
Lease operating expenses                                 $ 2.20     $ 2.11
Gathering and transportation costs and production taxes    0.23       0.21
Depreciation, depletion, amortization and accretion        4.03       3.29
General and administrative expenses                        0.78       1.10
Net cash provided by operating activities                  6.29       4.77
Adjusted EBITDA                                            6.23       5.45

    MMcfe and MBoe 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 2013 and 2012 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)
                                                    March 31,     December 31,
                                                    2013          2012
                                                    (In thousands, except
                                                    share data)
Assets
Current assets:
Cash and cash equivalents                           $ 12,277      $  12,245
Receivables:
Oil and natural gas sales                             97,309         97,733
Joint interest and other                              35,681         56,439
Income taxes                                          45,638         47,884
Total receivables                                     178,628        202,056
Deferred income taxes                                 1,432          267
Prepaid expenses and other assets                     22,363         25,555
Total current assets                                  214,700        240,123
Property and equipment – at cost:
Oil and natural gas properties and equipment (full
cost method, of which $125,485 at
March 31, 2013 and $123,503 at December 31, 2012
were excluded from
amortization)                                         6,836,590      6,694,510
Furniture, fixtures and other                         21,949         21,786
Total property and equipment                          6,858,539      6,716,296
Less accumulated depreciation, depletion and          4,759,198      4,655,841
amortization
Net property and equipment                            2,099,341      2,060,455
Restricted deposits for asset retirement              29,161         28,466
obligations
Other assets                                          18,855         19,943
Total assets                                        $ 2,362,057   $  2,348,987
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable                                    $ 112,223     $  123,885
Undistributed oil and natural gas proceeds            41,255         37,073
Asset retirement obligations                          69,964         92,630
Accrued liabilities                                   39,067         21,021
Total current liabilities                             262,509        274,609
Long-term debt                                        1,060,079      1,087,611
Asset retirement obligations, less current portion    308,261        291,423
Deferred income taxes                                 158,922        145,249
Other liabilities                                     8,288          8,908
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 March 31,        1              1
2013, and December 31, 2012
Additional paid-in capital                            398,465        396,186
Retained earnings                                     189,699        169,167
Treasury stock, at cost                               (24,167)       (24,167)
Total shareholders' equity                            563,998        541,187
Total liabilities and shareholders' equity          $ 2,362,057   $  2,348,987

W&T OFFSHORE, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(Unaudited)
                                                    Three Months Ended
                                                    March 31,
                                                    2013          2012
                                                    (In thousands)
Operating activities:
Net income                                          $ 26,618      $ 3,218
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation, depletion, amortization and             108,872       88,491
accretion
Amortization of debt issuance costs and premium       447           586
Share-based compensation                              2,255         2,659
Derivative loss                                       3,368         39,634
Cash payments on derivative settlements               (4,271)       (5,800)
Deferred income taxes                                 12,507        2,550
Asset retirement obligation settlements               (23,464)      (5,384)
Changes in operating assets and liabilities           43,502        2,203
Net cash provided by operating activities             169,834       128,157
Investing activities:
Investment in oil and natural gas properties and      (136,626)     (84,626)
equipment
Purchases of furniture, fixtures and other            (114)         (500)
Net cash used in investing activities                 (136,740)     (85,126)
Financing activities:
Borrowings of long-term debt                          112,000       84,000
Repayments of long-term debt                          (139,000)     (117,000)
Dividends to shareholders                             (6,020)       (5,948)
Other                                                 (42)          (87)
Net cash used in financing activities                 (33,062)      (39,035)
Increase in cash and cash equivalents                 32            3,996
Cash and cash equivalents, beginning of period        12,245        4,512
Cash and cash equivalents, end of period            $ 12,277      $ 8,508

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, 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
                                      March 31,
                                      2013                    2012
                                      (In thousands, except per share amounts)
                                      (Unaudited)
Net income                            $     26,618            $    3,218
Unrealized commodity derivative             (904)                  33,834
(gain) loss
Litigation accruals                         -                      8,300
Income tax adjustment to statutory          686                    (14,586)
rate
Net income excluding special items    $     26,400            $    30,766
Basic and diluted earnings per
common share, excluding special       $     0.35              $    0.40
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, 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
                                                     March 31,
                                                     2013        2012
                                                     (In thousands)
                                                     (Unaudited)
Net income                                           $ 26,618    $ 3,218
Income tax expense                                     14,902      1,981
Net interest expense                                   18,801      10,714
Depreciation, depletion, amortization and accretion    108,872     88,491
EBITDA                                                 169,193     104,404
Adjustments:
Unrealized commodity derivative (gain) loss            (904)       33,834
Litigation accruals                                    -           8,300
Adjusted EBITDA                                      $ 168,289   $ 146,538
Adjusted EBITDA Margin                                 65%         62%



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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