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W&T Offshore (WTI) Q1 Earnings Miss, Stock Declines 12.3%

Zacks Equity Research

W&T Offshore, Inc. WTI reported first-quarter 2019 adjusted earnings (excluding one-time items) of 5 cents per share, missing the Zacks Consensus Estimate of 11 cents and declining from the year-ago figure of 19 cents.

Quarterly revenues decreased to $116.1 million from $134.2 million a year ago. Moreover, the top line missed the Zacks Consensus Estimate of $121 million.

The weak first-quarter 2019 results were affected by lower price realizations, production volume decline, and surging costs and expenses. Notably, the stock tumbled 12.3%, following the earnings miss.

W&T Offshore, Inc. Price, Consensus and EPS Surprise

W&T Offshore, Inc. Price, Consensus and EPS Surprise | W&T Offshore, Inc. Quote

Production Falls

Total oil equivalent production averaged 33.3 barrels of oil equivalent per day (Boe/d), down from 37 Boe/d in the year-ago quarter. Oil production was recorded at 1,478 thousand barrels (MBbls), down from 1,557 MBbls in first-quarter 2018. Natural gas liquids output totaled 309 MBbls, lower than 351 MBbls in the year-ago period. Natural gas production fell from 8,523 million cubic feet (MMcf) in the year-ago period to 7,288 MMcf in the reported quarter. Of the total production in the quarter, 60% were liquids.

Prices Decline

The average realized price for oil during the first quarter was $58.66 a barrel, representing a decline from the year-ago level of $62.52. The average realized price of NGL fell from $27.54 per barrel in the year-ago period to $20.88. The average realized price of natural gas during the March quarter of 2019 was $3 per thousand cubic feet, representing a decrease from $3.03 in the year-ago period. Average realized price for oil equivalent output declined to $38.31 per barrel from $39.92 in the year-ago quarter.

Operating Expenses Rise

Total costs and expenses rose to $147.1 million in the quarter from the year-ago period’s $95.5 million. Lease operating expenses increased to $14.58 per barrel of oil equivalent (BOE) in the first quarter from the year-ago level of $11.07. General and administrative costs rose to $4.70 per BOE from $4.52 in first-quarter 2018.

Capital Spending & Balance Sheet

W&T Offshore spent $31.6 million capital through the March quarter of 2019 for oil and gas properties.

As of Mar 31, 2019, the company had approximately $86.1 million in cash and cash equivalents. It also had $220.9 million remaining under its revolving bank credit facility. The company had a long-term debt of $634 million.

Guidance

W&T Offshore expects production for second-quarter 2019 within 34,600-38,200 Boe/d. For 2019, W&T Offshore expects production in the band of 35,400-39,100 Boe/d.

Through 2019, the offshore oil and gas explorer expects lease operating expenses between $153 million and $169 million. For the second quarter, the metric is expected in the range of $42-$46 million.

Zacks Rank and Other Stocks to Consider

Currently, W&T Offshore carries a Zacks Rank #2 (Buy). Other prospective players in the energy space worth considering include Cactus, Inc. WHD, Hess Corporation HES and Chevron Corporation CVX, each holding a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.  

Cactus’ earnings growth is projected at 11.8% through 2019.

Hess’ earnings are expected to grow 90.5% through 2019.

Chevron’s earnings are likely to grow 13.5% on a year-over-year basis in the second quarter of 2019.

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