W&T OFFSHORE INC Q3 FY2024 earnings call

• Production: In the third quarter, production was 31,000 barrels of oil equivalent per day, impacted by hurricanes but majority restored with October production at around 34,000 barrels of oil equivalent per day. Work ongoing to bring remaining two fields from Q1 2024 acquisitions online for 2025 production boost.
• Costs: Lease operating expenses for Q3 2024 were $72.4 million, below guidance range and down 2% from Q2.
• Cash Flow: Year-to-date generated $54.9 million in free cash flow, with 7 consecutive years of positive free cash flow.
• Balance Sheet: Improved with adjusted EBITDA of $122 million YTD, cash on hand at $126.5 million and net debt at $266 million at end of Q3.
• Dividends: Returned cash to shareholders with fourth consecutive quarterly dividend in August, and fourth quarter 2024 dividend to be paid later in the month.
• Safety/ESG: 2024 has been an outstanding safety year with zero recordable safety incidents, TRIR rate 0.09, and focus on environmental stewardship and ESG.

In the third quarter, production was 31,000 barrels of oil equivalent per day, impacted by hurricanes but with October production at around 34,000 barrels of oil equivalent per day. Lease operating expenses for the third quarter of 2024 were $72.4 million, which was below the bottom end of the guidance range by 6% and down 2% compared to the second quarter. Year-to-date, adjusted EBITDA totaled $122 million, and free cash flow was $54.9 million. At the end of the third quarter, cash on hand rose to $126.5 million, and net debt was lowered to $266 million.

• Fourth quarter 2024 production guidance has a midpoint of 33,600 barrels of oil equivalent per day, expecting increase from Q3 due to less hurricane downtime.
• Plan to spend more on lease operating expenses in Q4 for deferred projects and bringing new fields online.
• CapEx excluding acquisitions for full year 2024预计$25 million to $35 million, down about $10 million at midpoint from prior estimate, directed to facilities projects in existing and new fields.

• Regulatory issues: Concerns with lawsuits like the Rice's whale lawsuit affecting operations, restricting boat speeds and times which would impact production.
• Financial assurance: Challenges with financial assurance requirements in the Gulf of Mexico, seen as punitive to the industry with concerns it affects operations only for oil and gas companies.

Q: John White asked about the acquisition market and drilling activity, with Tracy Krohn responding that the market is in flux due to election outcomes and regulatory challenges, expecting an uptick in acquisitions in the first half of next year.

A: Tracy Krohn stated, 'Things are in a bit of flux. I think people were standing down a little bit, trying to figure out what was going on with the elections... We do have wells that we want to get drilled, and this will help us with trying to estimate economics going forward. We think that you'll see an uptick in acquisitions certainly through the first and second quarters of next year.' Q: Jeffrey Robertson asked about the two shut-in fields from the Cox acquisition and regulatory impact on drilling partnerships, with Tracy Krohn responding about the fields and discussing regulatory issues like the Rice's whale lawsuit.

A: Tracy Krohn said, 'It will be several thousand barrels a day. One of them is more technically oriented with equipment at all, and the other one is more of a legal challenge... There is a challenge to that lawsuit. Now those orders are in abeyance at this point. But yes, I mean, there is a big concern that this is going to affect our operations.'