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W&T Offshore (WTI) Q2 Earnings & Revenues Beat Estimates

Zacks Equity Research

W&T Offshore, Inc. WTI reported second-quarter 2019 adjusted earnings (excluding one-time items) of 25 cents per share, beating the Zacks Consensus Estimate of 9 cents but declining from the year-ago figure of 29 cents.

Meanwhile, quarterly revenues decreased to $135 million from $150 million a year ago. However, the top line surpassed the Zacks Consensus Estimate of $127 million.

Although total production declined year over year, volumes were within the company’s guided range. This helped W&T Offshore to deliver better-than-expected results in the June quarter.

However, the year-over-year drop in the top and the bottom line was due to the increased lease operating expenses and weak oil equivalent prices.

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

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

W&T Offshore, Inc. price-consensus-eps-surprise-chart | W&T Offshore, Inc. Quote

Production Ramps Down

Total oil equivalent production averaging 35,045 barrels of oil equivalent per day (Boe/d), fell 7% from 37,571 Boe/d in the year-ago quarter. Oil production was recorded at 1.7 million barrels of oil (MMBbls), down 3.2% year over year. Natural gas liquids output totaled 264 MBbls, lower than 316 MBbls a year ago. Natural gas production at 7,450 MMcf in the reported quarter was lower than 8,186 million cubic feet (MMcf) in the year-earlier period. Of the total production in the quarter, 61% accounted for liquids.

However, as the company succeeds in generating positive cash flow, its production increased 5% to 3.2 million Boe from the level in first-quarter 2019.

Prices Decline

The average realized price for oil during the second quarter was $64.86 a barrel, lower than the year-ago level of $67.09. The average realized price of NGL softened to $17.59 from $27.61 per barrel in the prior year. The average realized price of natural gas during the June quarter was $2.63 per thousand cubic feet, down from $2.81 in the comparable period last year. Average realized price for oil equivalent output declined to $41.83 per barrel from $43.38 a year ago.

Operating Expenses

Lease operating expenses increased to $12.65 per barrel of oil equivalent (BOE) in the second quarter from $10.41 a year ago.

Capital Spending & Balance Sheet

W&T Offshore spent $41.6 million capital through the June quarter on oil and gas resources.

As of Jun 30, 2019, the company had approximately $65.7 million in cash and cash equivalents. It also had $221.8 million remaining under its revolving bank credit facility. The company had $634.4 million as long-term debt.

Guidance

W&T Offshore expects production for third-quarter 2019 within 38,600-42,500 Boe/d. For the full year, W&T Offshore’s production view has been raised to 38,900-42,200 Boe/d.

This offshore oil and gas explorer expects lease operating expenses through 2019 between $192 million and $204 million. For the third quarter, the metric is expected in the range of $56-$62 million.

Proved Reserves

W&T Offshore’s proved reserves as of Jun 30, 2019 totaled 84 million barrels of oil equivalent (MMBoe), flat with the figure at 2018 end.

Zacks Rank & Key Picks

W&T Offshore carries a Zacks Rank #3 (Hold). Better-ranked players in the energy space include Transportadora De Gas Sa Ord B TGS, World Fuel Services Corporation INT and Oasis Midstream Partners LP OMP. While Transportadora De Gas Sa Ord B and World Fuel Services Corporation sport a Zacks Rank #1 (Strong Buy), Oasis Midstream Partners LP holds a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Transportadora earnings beat the Zacks Consensus Estimate in the trailing four quarters.

World Fuel Services earnings beat the Zacks Consensus Estimate in the trailing four quarters.

Oasis Midstream Partners earnings beat the Zacks Consensus Estimate in two of the last four quarters.

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