On this page of StockholderLetter.com we present the 5/1/2023 shareholder letter from W&T OFFSHORE INC — ticker symbol WTI. Reading current and past WTI letters to shareholders can bring important insights into the investment thesis.
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5/1/2023 Letter Continued (Full PDF)
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4/29/2024 WTI Stockholder Letter
• 4/16/2025 WTI Stockholder Letter
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WTI Benford's Law Stock Score = 70
5/1/2023 Letter Continued (Full PDF)
•
4/29/2024 WTI Stockholder Letter•
4/16/2025 WTI Stockholder Letter•
More "Oil & Gas Exploration & Production" Category Stockholder Letters•
WTI Benford's Law Stock Score = 70WTI 5/1/2023 Shareholder/Stockholder Letter Transcript:
2022 ANNUAL REPORT Strengthening Our Platform THE 2022 ANNUAL REPORT TO SHAREHOLDERS Founded in 1983, W&T Offshore, Inc. (W&T) is an independent oil and natural gas producer with offshore operations across shallow and deep waters in the Gulf of Mexico (GOM). We have grown through a combination of attractive property acquisitions, methodical integration and exploitation of those acquisitions, and successful development and exploratory drilling on our legacy fields. A majority of our daily production is derived from wells we operate. As of December 31, 2022, we own working interests in 144 offshore structures, 103 of which are located in fields that we operate. We have ownership interests in 178 productive wells, 142 of which we operate. At year-end 2022, we have working interests in 47 offshore producing fields. These fields are in both federal and state waters and our leases cover approximately 625,000 gross acres, of which 458,000 acres are on the GOM shelf in less than 500 feet of water, 159,000 acres are in deepwater in 500 feet of water or greater, and 8,000 acres are in Alabama state waters. Approximately 77% of our average daily production is in shallow water while the balance is in deepwater. Our proved reserves totaled 165.3 million barrels of oil equivalent (MMBoe) at year-end 2022. W&T became a public company in 2005 and trades on the NYSE under the symbol WTI . Since W&T s founding nearly 40 years ago, our people have always been our most valuable asset. Through multiple commodity cycles over those many years, our culture, principles, values, and ultimately our success have been guided by our people. We are collectively focused on cash flow generation, operational excellence, corporate responsibility, and strengthening our financial position. We are excited for the future and look forward to sustainably growing the Company. 2022 Annual Report In 2022 we further strengthened both our operational and financial platforms. We completed two attractive producing property acquisitions in early 2022 and have successfully integrated them into our operations. These acquisitions have already paid out as of August 2022. Entering 2023, we strengthened our balance sheet by issuing new 2026 Senior Second Lien Notes at par totaling $275 million in a private offering and used the proceeds along with our considerable cash position to retire all of our 2023 Senior Second Lien Notes. We clearly had an outstanding year thanks in no small part to the ability of both our operations and finance teams to execute at a high level. Tracy W. Krohn Founder, Chairman, Chief Executive Officer and President 1 W&T Offshore, Inc. NYSE: WTI To my fellow Shareholders, opportunities. These are the operating principles that have enabled us to build value for our shareholders, while developing and producing oil and gas resources in a safe and environmentally responsible manner. These core values have provided the foundation for W&T to profitably grow over the past forty years through a combination of accretive property acquisitions, methodical integration and exploitation of those acquisitions, and successful development and exploratory drilling on our legacy fields, all while generating strong free cash flow to fund our growth. Tracy W. Krohn We are very pleased with our strong Founder, Chairman, Chief Executive Officer and President financial and operating results in 2022, which was one of the best years in our long and profitable history. Our most valuable asset, our people, have done an excellent job adapting to changing market conditions while maintaining the highest levels of safety and operational excellence. We are committed to a simple and successful strategy that has guided our success for the past four decades, which is focused on: 1) maximizing cash flow generation; 2) operating efficiently; 3) improving the profitability of our assets; and 4) opportunistically capitalizing on accretive acquisition 2 We are in a much stronger position today compared to a year ago, both operationally and financially. Because it is such an integral part of our strategy, I would like to point out that in every quarter of 2022, we produced positive free cash flow and we have done so for 20 consecutive quarters. We saw a 5% year-over-year increase in production to 40,100 barrels of oil equivalent per day in 2022, with about 49% being liquids. This increased production, coupled with strong commodity pricing, enabled W&T to report full year 2022 net income of $231.1 million or $1.59 cents per share and produce a record $376.4 million 2022 Annual Report 40.1 Average Production (MBoe/d) 921.0 Total Revenue ($mm) in free cash flow for 2022, which in a net gain from the transaction of was more than four times what we $151.4 million. Taking into account the generated in 2021. We completed cost of acquiring additional natural gas two attractive producing property calls with higher strike prices, total acquisitions in early 2022 and have net proceeds were $105.3 million. We successfully integrated them into our took advantage of the spike in natural operations, which further strengthened gas prices and restructured the strike our asset portfolio. prices on a portion of our purchased Over the past year, we took several steps to enhance our liquidity, lower our net debt, and improve our financial flexibility for the future. In mid-2022, natural gas calls to monetize some of the value of the call options while maintaining the ability to participate in future increases in natural gas prices. we monetized a portion of our natural We grew cash and cash equivalents gas hedge position, which resulted to $461.4 million at year-end 2022. Our net debt was down by $253 million or more than 50% lower compared to year-end 2021. We reduced net debt by $455 million over the past three years, while our liquidity improved by 73% year-over-year to $511 million at year-end 2022. In January and February 2023, we issued new 2026 second lien notes and paid off all of our 2023 second lien notes, significantly reducing our gross debt levels and our interest payments moving forward. The combination of all these successful financial initiatives further strengthened our balance sheet. Additionally, in the fourth quarter of 2022, the Company entered into an amendment to its Credit Facility, which, among other things, extended the maturity date and Calculus commitment by up to one year to January 3, 2024. We are well-positioned for success in 2023 with a meaningful cash position and significant liquidity in the current pricing environment. This provides W&T with significant financial flexibility, no near-term debt and further enhances our ability to 3