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)

6 Months Ended

Jun. 30, 2016

Supplemental Guarantor Information [Abstract]

W&T OFFSHORE, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(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 June 30, 2016

										Consolidated
	Parent			Guarantor						W&T
	Company			Subsidiaries			Eliminations			Offshore, Inc.
	(In thousands)
Assets
Current assets:
Cash and cash equivalents	$	171,824		$	—		$	—		$	171,824
Receivables:
Oil and natural gas sales		2,626			32,215			—			34,841
Joint interest and other		20,145			—			—			20,145
Income taxes		104,801			—			(99,202	)		5,599
Total receivables		127,572			32,215			(99,202	)		60,585
Prepaid expenses and other assets		15,797			2,461			—			18,258
Total current assets		315,193			34,676			(99,202	)		250,667
Property and equipment – at cost:
Oil and natural gas properties and equipment		5,672,644			2,228,608			—			7,901,252
Furniture, fixtures and other		20,873			—			—			20,873
Total property and equipment		5,693,517			2,228,608			—			7,922,125
Less accum. depreciation, depletion and amortization		5,297,078			1,973,181			(3,970	)		7,266,289
Net property and equipment		396,439			255,427			3,970			655,836
Deferred income taxes		6,305			2,158			—			8,463
Restricted deposits for asset retirement obligations		26,409			—			—			26,409
Income tax receivables		52,097			—			—			52,097
Other assets		384,408			283,212			(662,738	)		4,882
Total assets	$	1,180,851		$	575,473		$	(757,970	)	$	998,354
Liabilities and Shareholders’ Deficit
Current liabilities:
Accounts payable	$	85,708		$	7,144		$	—		$	92,852
Undistributed oil and natural gas proceeds		18,751			1,908			—			20,659
Asset retirement obligations		72,906			18,390			—			91,296
Accrued liabilities		12,035			99,178			(99,202	)		12,011
Total current liabilities		189,400			126,620			(99,202	)		216,818
Long-term debt		1,345,051			—			—			1,345,051
Asset retirement obligations, less current portion		137,295			115,531			—			252,826
Other liabilities		345,879			—			(329,417	)		16,462
Shareholders’ deficit:
Common stock		1			—			—			1
Additional paid-in capital		428,618			704,885			(704,885	)		428,618
Retained earnings (deficit)		(1,241,226	)		(371,563	)		375,534			(1,237,255	)
Treasury stock, at cost		(24,167	)		—			—			(24,167	)
Total shareholders’ deficit		(836,774	)		333,322			(329,351	)		(832,803	)
Total liabilities and shareholders’ deficit	$	1,180,851		$	575,473		$	(757,970	)	$	998,354

Condensed Consolidating Balance Sheet as of December 31, 2015

										Consolidated
	Parent			Guarantor						W&T
	Company			Subsidiaries			Eliminations			Offshore, Inc.
	(In thousands)
Assets
Current assets:
Cash and cash equivalents	$	85,414		$	—		$	—		$	85,414
Receivables:
Oil and natural gas sales		2,742			32,263			—			35,005
Joint interest and other		121,190			—			(99,178	)		22,012
Total receivables		123,932			32,263			(99,178	)		57,017
Prepaid expenses and other assets		25,375			1,504			—			26,879
Total current assets		234,721			33,767			(99,178	)		169,310
Property and equipment – at cost:
Oil and natural gas properties and equipment		5,682,793			2,219,701			—			7,902,494
Furniture, fixtures and other		20,802			—			—			20,802
Total property and equipment		5,703,595			2,219,701			—			7,923,296
Less accum. depreciation, depletion and amortization		5,258,563			1,822,273			(147,589	)		6,933,247
Net property and equipment		445,032			397,428			147,589			990,049
Deferred income taxes		27,251			344			—			27,595
Restricted deposits for asset retirement obligations		15,606			—			—			15,606
Other assets		498,782			266,748			(760,068	)		5,462
Total assets	$	1,221,392		$	698,287		$	(711,657	)	$	1,208,022
Liabilities and Shareholders’ Deficit
Current liabilities:
Accounts payable	$	100,282		$	9,515		$	—		$	109,797
Undistributed oil and natural gas proceeds		20,463			976			—			21,439
Asset retirement obligations		63,716			20,619			—			84,335
Accrued liabilities		11,922			99,178			(99,178	)		11,922
Total current liabilities		196,383			130,288			(99,178	)		227,493
Long-term debt		1,196,855			—			—			1,196,855
Asset retirement obligations, less current portion		173,105			120,882			—			293,987
Other liabilities		329,129			—			(312,951	)		16,178
Shareholders’ deficit:
Common stock		1			—			—			1
Additional paid-in capital		423,499			704,885			(704,885	)		423,499
Retained earnings (deficit)		(1,073,413	)		(257,768	)		405,357			(925,824	)
Treasury stock, at cost		(24,167	)		—			—			(24,167	)
Total shareholders’ deficit		(674,080	)		447,117			(299,528	)		(526,491	)
Total liabilities and shareholders’ deficit	$	1,221,392		$	698,287		$	(711,657	)	$	1,208,022

Condensed Consolidating Statement of Operations

Condensed Consolidating Statement of Operations for the Three Months Ended June 30, 2016

										Consolidated
	Parent			Guarantor						W&T
	Company			Subsidiaries			Eliminations			Offshore, Inc.
	(In thousands)
Revenues	$	43,914		$	55,741		$	—		$	99,655
Operating costs and expenses:
Lease operating expenses		19,254			17,368			—			36,622
Production taxes		370			—			—			370
Gathering and transportation		2,469			3,929			—			6,398
Depreciation, depletion, amortization and accretion		22,648			31,934			2,911			57,493
Ceiling test write-down of oil and natural gas properties		—			35,008			69,584			104,592
General and administrative expenses		7,360			8,875			—			16,235
Derivative loss		4,942			—			—			4,942
Total costs and expenses		57,043			97,114			72,495			226,652
Operating loss		(13,129	)		(41,373	)		(72,495	)		(126,997	)
Loss of affiliates		(40,765	)		—			40,765			—
Interest expense:
Incurred		29,735			38			—			29,773
Capitalized		(64	)		(38	)		—			(102	)
Other expense, net		(24	)		—			—			(24	)
Loss before income tax benefit		(83,541	)		(41,373	)		(31,730	)		(156,644	)
Income tax benefit		(35,114	)		(608	)		—			(35,722	)
Net loss	$	(48,427	)	$	(40,765	)	$	(31,730	)	$	(120,922	)

Condensed Consolidating Statement of Operations for the Six Months Ended June 30, 2016

										Consolidated
	Parent			Guarantor						W&T
	Company			Subsidiaries			Eliminations			Offshore, Inc.
	(In thousands)
Revenues	$	74,426		$	102,944		$	—		$	177,370
Operating costs and expenses:
Lease operating expenses		44,199			36,892			—			81,091
Production taxes		896			—			—			896
Gathering and transportation		4,022			7,468			—			11,490
Depreciation, depletion and amortization		43,271			70,095			7,860			121,226
Ceiling test write-down of oil and natural gas properties		—			85,392			135,759			221,151
General and administrative expenses		13,973			18,705			—			32,678
Derivative loss		2,449			—			—			2,449
Total costs and expenses		108,810			218,552			143,619			470,981
Operating loss		(34,384	)		(115,608	)		(143,619	)		(293,611	)
Loss of affiliates		(113,794	)		—			113,794			—
Interest expense:
Incurred		57,430			157			—			57,587
Capitalized		(288	)		(157	)		—			(445	)
Other expense, net		1,282			—			—			1,282
Loss before income tax benefit		(206,602	)		(115,608	)		(29,825	)		(352,035	)
Income tax benefit		(38,790	)		(1,814	)		—			(40,604	)
Net loss	$	(167,812	)	$	(113,794	)	$	(29,825	)	$	(311,431	)

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

									Consolidated
	Parent			Guarantor					W&T
	Company			Subsidiaries			Eliminations		Offshore, Inc.
	(In thousands)
Revenues	$	90,465		$	58,601		$	—	$	149,066
Operating costs and expenses:
Lease operating expenses		30,104			15,026			—		45,130
Production taxes		1,000			—			—		1,000
Gathering and transportation		2,769			2,024			—		4,793
Depreciation, depletion, amortization and accretion		58,023			45,319			—		103,342
Ceiling test write-down of oil and natural gas properties		181,300			71,472					252,772
General and administrative expenses		10,856			8,901			—		19,757
Derivative loss		1,078			—			—		1,078
Total costs and expenses		285,130			142,742			—		427,872
Operating loss		(194,665	)		(84,141	)		—		(278,806	)
Loss of affiliates		(54,548	)		—			54,548		—
Interest expense:
Incurred		25,322			794			—		26,116
Capitalized		(1,230	)		(794	)		—		(2,024	)
Other expense, net		1,685			—			—		1,685
Loss before income tax benefit		(274,990	)		(84,141	)		54,548		(304,583	)
Income tax benefit		(14,541	)		(29,593	)		—		(44,134	)
Net loss	$	(260,449	)	$	(54,548	)	$	54,548	$	(260,449	)

Condensed Consolidating Statement of Operations for the Six Months Ended June 30, 2015

									Consolidated
	Parent			Guarantor					W&T
	Company			Subsidiaries			Eliminations		Offshore, Inc.
	(In thousands)
Revenues	$	167,808		$	109,165		$	—	$	276,973
Operating costs and expenses:
Lease operating expenses		67,742			30,719			—		98,461
Production taxes		1,637			—			—		1,637
Gathering and transportation		5,334			4,283			—		9,617
Depreciation, depletion, amortization and accretion		129,374			99,435			—		228,809
Ceiling test write-down of oil and natural gas properties		371,995			141,167					513,162
General and administrative expenses		22,615			17,908			—		40,523
Derivative loss		1,078			—			—		1,078
Total costs and expenses		599,775			293,512			—		893,287
Operating loss		(431,967	)		(184,347	)		—		(616,314	)
Loss of affiliates		(119,552	)		—			119,552		—
Interest expense:
Incurred		47,554			1,508			—		49,062
Capitalized		(2,299	)		(1,508	)		—		(3,807	)
Other expense, net		1,683			—			—		1,683
Loss before income tax benefit		(598,457	)		(184,347	)		119,552		(663,252	)
Income tax benefit		(82,913	)		(64,795	)		—		(147,708	)
Net loss	$	(515,544	)	$	(119,552	)	$	119,552	$	(515,544	)

Condensed Consolidating Statement of Cash Flows

Condensed Consolidating Statement of Cash Flows for the Six Months Ended June 30, 2016

										Consolidated
										W&T
	Parent			Guarantor						Offshore,
	Company			Subsidiaries			Eliminations			Inc.
	(In thousands)
Operating activities:
Net loss	$	(167,812	)	$	(113,794	)	$	(29,825	)	$	(311,431	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation, depletion, amortization and accretion		43,271			70,095			7,860			121,226
Ceiling test write-down of oil and natural gas properties		—			85,392			135,759			221,151
Debt issuance costs write-off/amortization of debt items		1,880			—			—			1,880
Share-based compensation		5,121			—			—			5,121
Derivative loss		2,449			—			—			2,449
Cash receipts on derivative settlements, net		4,746			—			—			4,746
Deferred income taxes		21,099			(1,814	)		—			19,285
Loss of affiliates		113,794			—			(113,794	)		—
Changes in operating assets and liabilities:
Oil and natural gas receivables		1,177			49			—			1,226
Joint interest and other receivables		1,763			—			—			1,763
Income taxes		(57,931	)		—			—			(57,931	)
Prepaid expenses and other assets		(9,405	)		(17,424	)		16,464			(10,365	)
Asset retirement obligation settlements		(12,702	)		(12,454	)		—			(25,156	)
Accounts payable, accrued liabilities and other		(783	)		32,014			(16,464	)		14,767
Net cash provided by (used in) operating activities		(53,333	)		42,064			—			(11,269	)
Investing activities:
Investment in oil and natural gas properties and equipment		(8,600	)		(9,112	)		—			(17,712	)
Changes in operating assets and liabilities associated with investing activities		(670	)		(33,452	)		—			(34,122	)
Proceeds from sales of assets		1,000			500			—			1,500
Purchases of furniture, fixtures and other		(70	)		—			—			(70	)
Net cash used in investing activities		(8,340	)		(42,064	)		—			(50,404	)
Financing activities:
Borrowings of long-term debt – revolving bank credit facility		340,000			—			—			340,000
Repayments of long-term debt – revolving bank credit facility		(192,000	)		—			—			(192,000	)
Other		83			—			—			83
Net cash provided by financing activities		148,083			—			—			148,083
Increase in cash and cash equivalents		86,410			—			—			86,410
Cash and cash equivalents, beginning of period		85,414			—			—			85,414
Cash and cash equivalents, end of period	$	171,824		$	—		$	—		$	171,824

Condensed Consolidating Statement of Cash Flows for the Six Months Ended June 30, 2015

										Consolidated
										W&T
	Parent			Guarantor						Offshore,
	Company			Subsidiaries			Eliminations			Inc.
	(In thousands)
Operating activities:
Net loss	$	(515,544	)	$	(119,552	)	$	119,552		$	(515,544	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation, depletion, amortization and accretion		129,374			99,435			—			228,809
Ceiling test write-down of oil and natural gas properties		371,995			141,167			—			513,162
Debt issuance costs write-off/ amortization of debt items		2,432			—			—			2,432
Share-based compensation		5,708			—			—			5,708
Derivative loss		1,078			—			—			1,078
Deferred income taxes		(105,818	)		(41,890	)		—			(147,708	)
Loss of affiliates		119,552			—			(119,552	)		—
Changes in operating assets and liabilities:
Oil and natural gas receivables		18,710			(3,425	)		—			15,285
Joint interest and other receivables		11,036			—			—			11,036
Income taxes		22,580			(22,905	)		—			(325	)
Prepaid expenses and other assets		(31,091	)		94,890			(54,870	)		8,929
Asset retirement obligations		(21,146	)		(793	)		—			(21,939	)
Accounts payable, accrued liabilities and other		(74,370	)		(513	)		54,870			(20,013	)
Net cash provided by (used in) operating activities		(65,504	)		146,414			—			80,910
Investing activities:
Investment in oil and natural gas properties and equipment		(25,313	)		(125,681	)		—			(150,994	)
Changes in operating assets and liabilities associated with investing activities		(28,671	)		(22,178	)		—			(50,849	)
Investment in subsidiary		(1,445	)		—			1,445			—
Purchases of furniture, fixtures and other		(709	)		—			—			(709	)
Net cash used in investing activities		(56,138	)		(147,859	)		1,445			(202,552	)
Financing activities:
Borrowings of long-term debt – revolving bank credit facility		194,000			—			—			194,000
Repayments of long-term debt – revolving bank credit facility		(381,000	)		—			—			(381,000	)
Issuance of 9.00% Term Loan		297,000			—			—			297,000
Debt issuance costs		(6,407	)		—			—			(6,407	)
Other		54			—			—			54
Investment from parent		—			1,445			(1,445	)		—
Net cash provided by financing activities		103,647			1,445			(1,445	)		103,647
Decrease in cash and cash equivalents		(17,995	)		—			—			(17,995	)
Cash and cash equivalents, beginning of period		23,666			—			—			23,666
Cash and cash equivalents, end of period	$	5,671		$	—		$	—		$	5,671