W&T Offshore (WTI) Expands in Gulf of Mexico With $32M Deal
W&T Offshore, Inc. WTI, an independent oil and natural gas producer operating in the Gulf of Mexico, successfully completed the acquisition of working interests in eight shallow water oil and gas producing assets. The acquisition was finalized on Sep 20, 2023, for a gross consideration of $32 million, from an undisclosed private seller.
The acquired assets are strategically located within WTI's existing operational area, focusing on water depths ranging between 25 and 265 feet. The company gains an average working interest of 72% in these assets, offering substantial control over operations and production. As of Sep 12, 2023, the assets contributed approximately 2,400 barrels of oil equivalent per day, with oil accounting for 42% of this production.
The acquisition includes proven reserves of 3.2 million barrels of oil equivalent, with 49% of that being oil. All of these reserves are classified as proved developed, providing a stable foundation for future growth. W&T Offshore secured these assets at a gross price of $32 million, with an accretive purchase price multiple of approximately 1.0x based on the last 12 months' cash flows as of the effective date. The production multiple stands at approximately $13,500 per barrel of oil equivalent per day, based on production as of Sep 12, 2023.
According to Tracy W. Krohn, chairman, president and CEO of W&T Offshore, all of the producing properties included in the acquisition meets WTI’s time-tested investment criteria. He added that the acquired assets have strong production rates, generate positive free cash flow, and have a solid base of proved developed reserves and identified upside potential with strong 2P reserves.
Zacks Rank & Key Picks
Currently, W&T Offshore carries a Zacks Rank #3 (Hold).
Some better-ranked players in the energy sector are USA Compression Partners, LP USAC and Helix Energy Solutions Group, Inc. HLX, both currently sporting a Zacks Rank #1 (Strong Buy), and Core Laboratories Inc CLB, carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
USA Compression Partners is one of the largest independent natural gas compression service providers across the United States in terms of fleet horsepower. USAC has witnessed an upward earnings estimate revision for 2024 in the past 30 days.
Helix Energy Solutionsis an international offshore energy company that provides specialty services to the offshore energy industry, with a focus on its growing well intervention and robotic operations. HLX has witnessed an upward earnings estimate revision for 2023 and 2024 over the past 60 days.
Core Laboratories’ strong presence in the emerging shale plays and its global footprint will provide for steady growth rates going forward. CLB’s technology-heavy portfolio of proprietary products and services gives it the opportunity to optimize production from new and existing fields. Core Labs has witnessed an upward earnings estimate revision for 2024 in the past 60 days.
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