W&T Offshore Inc (WTI) Q1 2024 Earnings: Performance and Strategic Acquisitions Highlight

GuruFocus Research

10 May 2024 at 6:32 pm·3-min read

Revenue: Reported at $140.8 million for Q1 2024, surpassing the estimated $139.56 million.
Net Loss: Recorded at $11.47 million, significantly above the estimated net loss of $7.68 million.
Earnings Per Share (EPS): Reported at -$0.08, missing the estimated EPS of -$0.06.
Free Cash Flow: Achieved over $32 million, marking the 25th consecutive quarter of positive Free Cash Flow, and doubling both the prior quarter and Q1 2023 figures.
Production: Increased to 35.1 MBoe/d in Q1 2024 from 34.1 MBoe/d in Q4 2023, primarily due to the Cox acquisition.
Adjusted EBITDA: Increased to $49.4 million, up 10% from the previous quarter, outpacing a 3% increase in production.
Dividend: Declared a Q2 2024 dividend of $0.01 per share, continuing the quarterly dividend initiated in November 2023.

Warning! GuruFocus has detected 4 Warning Signs with WTI.

On May 10, 2024, W&T Offshore Inc (NYSE:WTI), a prominent player in the oil and gas exploration sector, disclosed its financial results for the first quarter of 2024 through an 8-K filing. The company, known for its operations in the Gulf of Mexico, reported a mix of achievements and challenges during the quarter, underscoring the complexities of the energy market.

Company Overview

W&T Offshore Inc specializes in the exploration and production of oil and natural gas, primarily in the Gulf of Mexico. The company's operations include both deepwater and shallow-water drilling. W&T Offshore's portfolio primarily generates revenue from crude oil, complemented by smaller contributions from natural gas and natural gas liquids.

Financial Performance

For Q1 2024, W&T Offshore reported revenues of $140.8 million, marking a 7% increase from the $131.7 million recorded in the same period last year. This improvement was primarily driven by a 15% increase in oil production, largely attributable to the strategic Cox acquisition completed in January 2024. Despite this, the company faced a net loss of $11.474 million, or $0.08 per share, influenced by various operational and market challenges.

Operational Highlights and Challenges

The company's production for the quarter stood at 35.1 MBoe/d, with oil production constituting 44% of the total output. The average realized price per Boe was $42.55, reflecting a slight increase from the previous quarter but a decrease from the previous year. Lease operating expenses were reported at $70.8 million, below the guidance range due to deferred maintenance, which also contributed to the increased Adjusted EBITDA of $49.4 million.

However, the company anticipates higher lease operating expenses in the upcoming quarter due to the completion of deferred workovers and facilities projects. General and administrative expenses also rose to $20.5 million, primarily due to higher payroll and benefits costs.

Strategic Acquisitions and Dividend Declaration

The acquisition of Cox assets has been a significant move for W&T Offshore, enhancing its production capabilities and operational synergies. The company also continued its commitment to shareholder returns by declaring a quarterly dividend of $0.01 per share for the second quarter of 2024.

Financial Position and Outlook

As of March 31, 2024, W&T Offshore maintained a healthy liquidity position with $94.8 million in cash and cash equivalents and $50.0 million available under its revolving credit facility. The company's total debt stood at $391.2 million, with net debt amounting to $296.4 million. Looking forward, W&T Offshore has provided guidance for the second quarter and full year 2024, expecting total production to range between 2,972 MBoe and 3,392 MBoe for Q2, and between 12,417 MBoe and 14,592 MBoe for the full year.

In conclusion, while W&T Offshore faces ongoing challenges such as fluctuating commodity prices and operational expenses, its strategic acquisitions and focus on increasing oil production capacity position it well for future growth and sustainability in the competitive oil and gas market.

Explore the complete 8-K earnings release (here) from W&T Offshore Inc for further details.

This article first appeared on GuruFocus.

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Company Overview

Financial Performance

Operational Highlights and Challenges

Strategic Acquisitions and Dividend Declaration

Financial Position and Outlook

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