The Company Also Announces a Successful Exploration Well at Ewing Bank 910 Field
HOUSTON, Sept. 25, 2018 /PRNewswire/ -- W&T Offshore, Inc. (WTI) today announced that it has entered into a definitive purchase and sale agreement to divest its ownership in overriding royalty interests in the Permian Basin for $56.8 million. The transaction, subject to customary closing conditions and adjustments, is expected to close on or before October 1, 2018.
The Company also announced that it has successfully drilled an exploration well from the South Timbalier 311 platform that is part of the Ewing Bank 910 field. The ST 320 A-2 exploratory well has reached total depth and is being prepared for completion. The Company logged approximately 163 feet of net hydrocarbon, which exceeds pre-drill estimates. W&T expects to have the well on production via existing infrastructure before year-end 2018.
Following the completion of the ST 320 A-2 well, the rig will spud the ST 320 A-3 well, another low-risk exploration opportunity in the Ewing Bank 910 field. Stratigraphic information from a high quality thick Miocene sand that was penetrated up-hole in the ST 320 A-2 well has lowered the perceived risk on the ST 320 A-3 oil prospect.
Both of these wells in the Ewing Bank 910 field are part of a drilling joint venture program established by W&T and private investors in 2018 ("JV Drilling Program"). Prior to inclusion of these wells in the JV Drilling Program, W&T's working interest in these wells were 36%. As a result of the JV Drilling Program and other promoted working interests at the ST 320 A-2 well, W&T is expected to contribute 4.8% of the total capital expenditures and will receive 10.8% of the net revenues less expenses until certain thresholds are met, at which time W&T's effective interest in this well will increase to 13.8%.
Tracy Krohn, W&T Offshore's Chairman and CEO, stated, "The divestiture of our non-core, non-operated onshore asset will enhance our already strong cash position as we optimize our balance sheet for future growth. We are continuing to have excellent drilling success in the Gulf of Mexico and delivering solid results for our JV Drilling Program. The ST 320 A-2 well success further supports our plan to execute and bring forward our high-quality prospect inventory."
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 has grown through acquisitions, exploration and development. The Company currently has working interests in 48 producing fields in federal and state waters and has under lease approximately 650,000 gross acres, including approximately 440,000 gross acres on the Gulf of Mexico Shelf and approximately 210,000 gross acres in the deepwater. A majority of the Company's daily production is derived from wells it operates. For more information on W&T Offshore, please visit the Company's website at www.wtoffshore.com.
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. 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, 2017 and subsequent Form 10-Q reports found at www.sec.gov or at our website at www.wtoffshore.com under the Investor Relations section. Investors are urged to consider closely the disclosures and risk factors in these reports.
Dennard Lascar Investor Relations
VP & CFO