W&T Offshore, Inc. Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

Supplemental Guarantor Information (Tables)

Supplemental Guarantor Information (Tables)

9 Months Ended

Sep. 30, 2015

Supplemental Guarantor Information [Abstract]

W&T OFFSHORE, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

The following condensed consolidating financial information presents the financial condition, results of operations and cash flows of the Parent Company and the Guarantor Subsidiaries, together with consolidating adjustments necessary to present the Company’s results on a consolidated basis. Transfers of property were made from the Parent Company to the Guarantor Subsidiaries. As these transfers were transactions between entities under common control, the prior period financial information has been retrospectively adjusted for comparability purposes, as prescribed under authoritative guidance. None of the adjustments had any effect on the consolidated results for the current or prior periods presented.

Condensed Consolidating Balance Sheet as of September 30, 2015

										Consolidated
	Parent			Guarantor						W&T
	Company			Subsidiaries			Eliminations			Offshore, Inc.
	(In thousands)
Assets
Current assets:
Cash and cash equivalents	$	7,463		$	—		$	—		$	7,463
Receivables:
Oil and natural gas sales		15,798			28,157			—			43,955
Joint interest and other		116,178			—			(73,743	)		42,435
Total receivables		131,976			28,157			(73,743	)		86,390
Deferred income taxes		6,848			1,864			(4,384	)		4,328
Prepaid expenses and other assets		24,693			820			—			25,513
Total current assets		170,980			30,841			(78,127	)		123,694
Property and equipment – at cost:
Oil and natural gas properties and equipment		6,071,263			2,185,855			—			8,257,118
Furniture, fixtures and other		21,372			—			—			21,372
Total property and equipment		6,092,635			2,185,855			—			8,278,490
Less accumulated depreciation, depletion and amortization		5,229,074			1,609,001			—			6,838,075
Net property and equipment		863,561			576,854			—			1,440,415
Restricted deposits for asset retirement obligations		15,578			—			—			15,578
Other assets		744,364			292,411			(1,016,491	)		20,284
Total assets	$	1,794,483		$	900,106		$	(1,094,618	)	$	1,599,971
Liabilities and Shareholders’ Equity
Current liabilities:
Accounts payable	$	101,848		$	5,621		$	—		$	107,469
Undistributed oil and natural gas proceeds		27,816			1,054			—			28,870
Asset retirement obligations		64,085			20,503			—			84,588
Accrued liabilities		44,610			68,304			(73,743	)		39,171
Total current liabilities		238,359			95,482			(73,743	)		260,098
Long-term debt, less current maturities		1,473,348			—			—			1,473,348
Asset retirement obligations, less current portion		191,066			123,972			—			315,038
Deferred income taxes		341			17,216			(4,384	)		13,173
Other liabilities		367,120			—			(353,055	)		14,065
Shareholders’ equity:
Common stock		1			—			—			1
Additional paid-in capital		422,633			704,885			(704,885	)		422,633
Retained earnings (deficit)		(874,218	)		(41,449	)		41,449			(874,218	)
Treasury stock, at cost		(24,167	)		—			—			(24,167	)
Total shareholders’ equity (deficit)		(475,751	)		663,436			(663,436	)		(475,751	)
Total liabilities and shareholders’ equity	$	1,794,483		$	900,106		$	(1,094,618	)	$	1,599,971

Condensed Consolidating Balance Sheet as of December 31, 2014

									Consolidated
	Parent			Guarantor					W&T
	Company			Subsidiaries		Eliminations			Offshore, Inc.
	(In thousands)
Assets
Current assets:
Cash and cash equivalents	$	23,666		$	—	$	—		$	23,666
Receivables:
Oil and natural gas sales		41,820			25,422		—			67,242
Joint interest and other		142,885			—		(99,240	)		43,645
Total receivables		184,705			25,422		(99,240	)		110,887
Deferred income taxes		9,797			1,865		—			11,662
Prepaid expenses and other assets		28,728			7,619		—			36,347
Total current assets		246,896			34,906		(99,240	)		182,562
Property and equipment – at cost:
Oil and natural gas properties and equipment		6,038,915			2,006,751		—			8,045,666
Furniture, fixtures and other		23,269			—		—			23,269
Total property and equipment		6,062,184			2,006,751		—			8,068,935
Less accumulated depreciation, depletion and amortization		4,442,899			1,132,179		—			5,575,078
Net property and equipment		1,619,285			874,572		—			2,493,857
Restricted deposits for asset retirement obligations		15,444			—		—			15,444
Other assets		974,049			357,992		(1,314,797	)		17,244
Total assets	$	2,855,674		$	1,267,470	$	(1,414,037	)	$	2,709,107
Liabilities and Shareholders’ Equity
Current liabilities:
Accounts payable	$	188,654		$	5,455	$	—		$	194,109
Undistributed oil and natural gas proceeds		36,130			879		—			37,009
Asset retirement obligations		30,711			5,292		—			36,003
Accrued liabilities		17,437			99,180		(99,240	)		17,377
Total current liabilities		272,932			110,806		(99,240	)		284,498
Long-term debt, less current maturities		1,360,057			—		—			1,360,057
Asset retirement obligations, less current portion		235,876			118,689		—			354,565
Deferred income taxes		59,616			127,372		—			186,988
Other liabilities		417,885			—		(404,194	)		13,691
Shareholders’ equity:
Common stock		1			—		—			1
Additional paid-in capital		414,580			703,440		(703,440	)		414,580
Retained earnings		118,894			207,163		(207,163	)		118,894
Treasury stock, at cost		(24,167	)		—		—			(24,167	)
Total shareholders’ equity		509,308			910,603		(910,603	)		509,308
Total liabilities and shareholders’ equity	$	2,855,674		$	1,267,470	$	(1,414,037	)	$	2,709,107

Condensed Consolidating Statement of Income

Condensed Consolidating Statement of Operations for the Three Months Ended September 30, 2015

									Consolidated
	Parent			Guarantor					W&T
	Company			Subsidiaries			Eliminations		Offshore, Inc.
	(In thousands)
Revenues	$	71,092		$	55,136		$	—	$	126,228
Operating costs and expenses:
Lease operating expenses		29,721			15,318			—		45,039
Production taxes		889			—			—		889
Gathering and transportation		1,712			1,860			—		3,572
Depreciation, depletion, amortization and accretion		50,960			46,369			—		97,329
Ceiling test write-down of oil and natural gas properties		244,952			196,736			—		441,688
General and administrative expenses		8,590			7,925			—		16,515
Derivative gain		(10,231	)		—			—		(10,231	)
Total costs and expenses		326,593			268,208			—		594,801
Operating loss		(255,501	)		(213,072	)		—		(468,573	)
Loss of affiliates		(129,061	)		—			129,061		—
Interest expense:
Incurred		27,911			843			—		28,754
Capitalized		(1,360	)		(843	)		—		(2,203	)
Other (income) expense, net		964			—			—		964
Loss before income tax expense (benefit)		(412,077	)		(213,072	)		129,061		(496,088	)
Income tax expense (benefit)		65,491			(84,011	)		—		(18,520	)
Net loss	$	(477,568	)	$	(129,061	)	$	129,061	$	(477,568	)

Condensed Consolidating Statement of Operations for the Nine Months Ended September 30, 2015

									Consolidated
	Parent			Guarantor					W&T
	Company			Subsidiaries			Eliminations		Offshore, Inc.
	(In thousands)
Revenues	$	238,900		$	164,301		$	—	$	403,201
Operating costs and expenses:
Lease operating expenses		97,463			46,037			—		143,500
Production taxes		2,526			—			—		2,526
Gathering and transportation		7,046			6,143			—		13,189
Depreciation, depletion, amortization and accretion		180,334			145,804			—		326,138
Ceiling test write-down of oil and natural gas properties		616,947			337,903			—		954,850
General and administrative expenses		31,205			25,833			—		57,038
Derivative gain		(9,153	)		—			—		(9,153	)
Total costs and expenses		926,368			561,720			—		1,488,088
Operating loss		(687,468	)		(397,419	)		—		(1,084,887	)
Loss of affiliates		(248,613	)		—			248,613		—
Interest expense:
Incurred		75,465			2,351			—		77,816
Capitalized		(3,659	)		(2,351	)		—		(6,010	)
Other (income) expense, net		2,647			—			—		2,647
Loss before income tax benefit		(1,010,534	)		(397,419	)		248,613		(1,159,340	)
Income tax benefit		(17,422	)		(148,806	)		—		(166,228	)
Net loss	$	(993,112	)	$	(248,613	)	$	248,613	$	(993,112	)

Condensed Consolidating Statement of Operations for the Three Months Ended September 30, 2014

									Consolidated
	Parent			Guarantor					W&T
	Company			Subsidiaries			Eliminations		Offshore, Inc.
	(In thousands)
Revenues	$	145,950		$	88,571		$	—	$	234,521
Operating costs and expenses:
Lease operating expenses		46,793			24,939			—		71,732
Production taxes		1,794			—			—		1,794
Gathering and transportation		2,872			1,243			—		4,115
Depreciation, depletion, amortization and accretion		70,922			57,749			—		128,671
General and administrative expenses		11,450			9,557			—		21,007
Derivative gain		(13,781	)		—			—		(13,781	)
Total costs and expenses		120,050			93,488			—		213,538
Operating income (loss)		25,900			(4,917	)		—		20,983
Loss of affiliates		(5,729	)		—			5,729		—
Interest expense:
Incurred		20,932			851			—		21,783
Capitalized		(1,340	)		(851	)		—		(2,191	)
Other (income) expense, net		(197)								(197)
Income before income tax expense		776			(4,917	)		5,729		1,588
Income tax expense		92			812			—		904
Net income (loss)	$	684		$	(5,729	)	$	5,729	$	684

Condensed Consolidating Statement of Operations for the Nine Months Ended September 30, 2014

										Consolidated
	Parent			Guarantor						W&T
	Company			Subsidiaries			Eliminations			Offshore, Inc.
	(In thousands)
Revenues	$	448,107		$	303,924		$	—		$	752,031
Operating costs and expenses:
Lease operating expenses		126,966			62,150			—			189,116
Production taxes		5,628			—			—			5,628
Gathering and transportation		8,452			4,944			—			13,396
Depreciation, depletion, amortization and accretion		203,040			177,173			—			380,213
General and administrative expenses		33,299			30,978			—			64,277
Derivative loss		6,790			—			—			6,790
Total costs and expenses		384,175			275,245			—			659,420
Operating income		63,932			28,679			—			92,611
Earnings of affiliates		16,211			—			(16,211	)		—
Interest expense:
Incurred		63,078			1,625			—			64,703
Capitalized		(4,797	)		(1,625	)		—			(6,422	)
Other (income) expense, net		(205)									(205)
Income before income tax expense		22,067			28,679			(16,211	)		34,535
Income tax expense		357			12,468			—			12,825
Net income	$	21,710		$	16,211		$	(16,211	)	$	21,710

Condensed Consolidating Statement of Cash Flows

Condensed Consolidating Statement of Cash Flows for the Nine Months Ended September 30, 2015

										Consolidated
	Parent			Guarantor						W&T
	Company			Subsidiaries			Eliminations			Offshore, Inc.
	(In thousands)
Operating activities:
Net loss	$	(993,112	)	$	(248,613	)	$	248,613		$	(993,112	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation, depletion, amortization and accretion		180,334			145,804			—			326,138
Ceiling test write-down of oil and gas properties		616,947			337,903			—			954,850
Debt issuance costs write-off/amortization of debt items		2,862			—			—			2,862
Share-based compensation		8,313			—			—			8,313
Derivative gain		(9,153	)		—			—			(9,153	)
Cash receipts on derivative settlements, net		2,139			—			—			2,139
Deferred income taxes		(50,743	)		(115,515	)		—			(166,258	)
Loss of affiliates		248,613			—			(248,613	)		—
Changes in operating assets and liabilities:
Oil and natural gas receivables		26,022			(2,735	)		—			23,287
Joint interest and other receivables		1,210			—			—			1,210
Income taxes		33,002			(33,291	)		—			(289	)
Prepaid expenses and other assets		(47,057	)		114,888			(51,139	)		16,692
Asset retirement obligation settlements		(22,901	)		(2,614	)		—			(25,515	)
Accounts payable, accrued liabilities and other		(57,851	)		341			51,139			(6,371	)
Net cash provided by (used in) operating activities		(61,375	)		196,168			—			134,793
Investing activities:
Investment in oil and natural gas properties and equipment		(29,930	)		(162,881	)		—			(192,811	)
Changes in operating assets and liabilities associated with investing activities		(30,731	)		(34,732	)		—			(65,463	)
Investment in subsidiary		(1,445	)		—			1,445			—
Purchases of furniture, fixtures and other		(1,185	)		—			—			(1,185	)
Net cash used in investing activities		(63,291	)		(197,613	)		1,445			(259,459	)
Financing activities:
Borrowings of long-term debt – revolving bank credit facility		263,000			—			—			263,000
Repayments of long-term debt – revolving bank credit facility		(445,000	)		—			—			(445,000	)
Issuance of 9.00% Term Loan		297,000			—			—			297,000
Debt issuance costs		(6,591	)		—			—			(6,591	)
Other		54			—			—			54
Investment from parent		—			1,445			(1,445	)		—
Net cash provided by financing activities		108,463			1,445			(1,445	)		108,463
Decrease in cash and cash equivalents		(16,203	)		—			—			(16,203	)
Cash and cash equivalents, beginning of period		23,666			—			—			23,666
Cash and cash equivalents, end of period	$	7,463		$	—		$	—		$	7,463

Condensed Consolidating Statement of Cash Flows for the Nine Months Ended September 30, 2014

										Consolidated
	Parent			Guarantor						W&T
	Company			Subsidiaries			Eliminations			Offshore, Inc.
	(In thousands)
Operating activities:
Net income	$	21,710		$	16,211		$	(16,211	)	$	21,710
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, depletion, amortization and accretion		203,040			177,173			—			380,213
Amortization of debt issuance costs and premium		537			—			—			537
Share-based compensation		11,398			—			—			11,398
Derivative loss		6,790			—			—			6,790
Cash payments on derivative settlements		(18,543	)		—			—			(18,543	)
Deferred income taxes		17,621			(4,796	)		—			12,825
Earnings of affiliates		(16,211	)		—			16,211			—
Changes in operating assets and liabilities:
Oil and natural gas receivables		9,041			(9,977	)		—			(936	)
Joint interest and other receivables		1,890			—			—			1,890
Income taxes		(14,381	)		17,265			—			2,884
Prepaid expenses and other assets		55,450			(61,646	)		27,424			21,228
Asset retirement obligations		(28,492	)		(13,519	)		—			(42,011	)
Accounts payable, accrued liabilities and other		44,296			4,921			(27,424	)		21,793
Net cash provided by operating activities		294,146			125,632			—			419,778
Investing activities:
Acquisition of property interest in oil and natural gas properties		(18,152	)		(53,363	)		—			(71,515	)
Investment in oil and natural gas properties and equipment		(245,561	)		(138,392	)		—			(383,953	)
Changes in operating assets and liabilities associated with investing activities		(2,258	)		7,425			—			5,167
Investment in subsidiary		(58,698	)		—			58,698			—
Purchases of furniture, fixtures and other		(2,181	)		—			—			(2,181	)
Net cash used in investing activities		(326,850	)		(184,330	)		58,698			(452,482	)
Financing activities:
Borrowings of long-term debt – revolving bank credit facility		378,000			—			—			378,000
Repayments of long-term debt – revolving bank credit facility		(321,000	)		—			—			(321,000	)
Dividends to shareholders		(22,695	)		—			—			(22,695	)
Other		(181	)		—			—			(181	)
Investment from parent		—			58,698			(58,698	)		—
Net cash provided in financing activities		34,124			58,698			(58,698	)		34,124
Increase in cash and cash equivalents		1,420			—			—			1,420
Cash and cash equivalents, beginning of period		15,800			—			—			15,800
Cash and cash equivalents, end of period	$	17,220		$	—		$	—		$	17,220