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)

3 Months Ended

Mar. 31, 2017

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. As to the ceiling test write-down recorded in 2016, the computation is performed for each subsidiary on a stand-alone basis and also for the consolidated Company. Due to this methodology, consolidating adjustments are required to present the consolidated results appropriately.

Condensed Consolidating Balance Sheet as of March 31, 2017

										Consolidated
	Parent			Guarantor						W&T
	Company			Subsidiaries			Eliminations			Offshore, Inc.
	(In thousands)
Assets
Current assets:
Cash and cash equivalents	$	126,095		$	—		$	—		$	126,095
Receivables:
Oil and natural gas sales		4,177			40,777			—			44,954
Joint interest		16,843			—			—			16,843
Income taxes		116,699			—			(104,756	)		11,943
Total receivables		137,719			40,777			(104,756	)		73,740
Prepaid expenses and other assets		14,034			3,101			—			17,135
Total current assets		277,848			43,878			(104,756	)		216,970

Oil and natural gas properties and other, net		367,782			172,017			(1,685	)		538,114

Restricted deposits for asset retirement obligations		28,224			—			—			28,224
Income tax receivables		59,789			—			—			59,789
Other assets		412,398			386,092			(787,087	)		11,403
Total assets	$	1,146,041		$	601,987		$	(893,528	)	$	854,500
Liabilities and Shareholders’ Equity (Deficit)
Current liabilities:
Accounts payable	$	74,328		$	7,070		$	—		$	81,398
Undistributed oil and natural gas proceeds		20,448			1,918			—			22,366
Asset retirement obligations		49,788			16,362			—			66,150
Accrued liabilities		20,663			104,629			(104,756	)		20,536
Long-term debt		8,250			—			—			8,250
Total current liabilities		173,477			129,979			(104,756	)		198,700
Long-term debt:
Principal		873,733			—			—			873,733
Carrying value adjustments		137,001			—			—			137,001
Long term debt, less current portion - carrying value		1,010,734			—			—			1,010,734

Asset retirement obligations, less current portion		143,434			117,216			—			260,650
Other liabilities		449,521			—			(432,295	)		17,226
Shareholders’ deficit:
Common stock		1			—			—			1
Additional paid-in capital		541,901			704,885			(704,885	)		541,901
Retained earnings (deficit)		(1,148,860	)		(350,093	)		348,408			(1,150,545	)
Treasury stock, at cost		(24,167	)		—			—			(24,167	)
Total shareholders’ equity (deficit)		(631,125	)		354,792			(356,477	)		(632,810	)
Total liabilities and shareholders’ equity (deficit)	$	1,146,041		$	601,987		$	(893,528	)	$	854,500

Condensed Consolidating Balance Sheet as of December 31, 2016

										Consolidated
	Parent			Guarantor						W&T
	Company			Subsidiaries			Eliminations			Offshore, Inc.
	(In thousands)
Assets
Current assets:
Cash and cash equivalents	$	70,236		$	—		$	—		$	70,236
Receivables:
Oil and natural gas sales		2,173			40,900			—			43,073
Joint interest		21,885			—			—			21,885
Insurance reimbursement		30,100			—			—			30,100
Income taxes		111,215			—			(99,272	)		11,943
Total receivables		165,373			40,900			(99,272	)		107,001
Prepaid expenses and other assets		12,448			2,056			—			14,504
Total current assets		248,057			42,956			(99,272	)		191,741

Oil and natural gas properties and other, net		360,966			187,040			(953	)		547,053

Restricted deposits for asset retirement obligations		27,371			—			—			27,371
Income tax receivables		52,097			—			—			52,097
Other assets		394,931			344,742			(728,209	)		11,464
Total assets	$	1,083,422		$	574,738		$	(828,434	)	$	829,726
Liabilities and Shareholders’ Deficit
Current liabilities:
Accounts payable	$	74,306		$	6,733		$	—		$	81,039
Undistributed oil and natural gas proceeds		24,493			1,761			—			26,254
Asset retirement obligations		62,261			16,003			—			78,264
Long-term debt		8,272			—			—			8,272
Accrued liabilities		9,293			99,179			(99,272	)		9,200
Total current liabilities		178,625			123,676			(99,272	)		203,029
Long-term debt:
Principal		873,733			—			—			873,733
Carrying value adjustments		138,722			—			—			138,722
Long term debt, less current portion - carrying value		1,012,455			—			—			1,012,455

Asset retirement obligations, less current portion		142,376			113,798			—			256,174
Other liabilities		408,050			—			(390,945	)		17,105
Shareholders’ deficit:
Common stock		1			—			—			1
Additional paid-in capital		539,973			704,885			(704,885	)		539,973
Retained earnings (deficit)		(1,173,891	)		(367,621	)		366,668			(1,174,844	)
Treasury stock, at cost		(24,167	)		—			—			(24,167	)
Total shareholders’ deficit		(658,084	)		337,264			(338,217	)		(659,037	)
Total liabilities and shareholders’ deficit	$	1,083,422		$	574,738		$	(828,434	)	$	829,726

Condensed Consolidating Statement of Operations

Condensed Consolidating Statement of Operations for the Three Months Ended March 31, 2017

									Consolidated
	Parent			Guarantor					W&T
	Company			Subsidiaries		Eliminations			Offshore, Inc.
	(In thousands)
Revenues	$	53,707		$	70,686	$	—		$	124,393
Operating costs and expenses:
Lease operating expenses		23,702			16,462		—			40,164
Production taxes		515			—		—			515
Gathering and transportation		2,566			3,643		—			6,209
Depreciation, depletion, amortization and accretion		19,154			20,105		731			39,990
General and administrative expenses		5,776			7,498		—			13,274
Derivative gain		(3,955	)		—		—			(3,955	)
Total costs and expenses		47,758			47,708		731			96,197
Operating income		5,949			22,978		(731	)		28,196
Earnings of affiliates		17,527			—		(17,527	)		—
Interest expense incurred		11,294			—		—			11,294
Other expense, net		191			—		—			191
Income before income tax benefit		11,991			22,978		(18,258	)		16,711
Income tax benefit		(13,039	)		5,451		—			(7,588	)
Net income	$	25,030		$	17,527	$	(18,258	)	$	24,299

Condensed Consolidating Statement of Operations for the Three Months Ended March 31, 2016

										Consolidated
	Parent			Guarantor						W&T
	Company			Subsidiaries			Eliminations			Offshore, Inc.
	(In thousands)
Revenues	$	30,512		$	47,203		$	—		$	77,715
Operating costs and expenses:
Lease operating expenses		24,945			19,524			—			44,469
Production taxes		526			—			—			526
Gathering and transportation		1,553			3,539			—			5,092
Depreciation, depletion, amortization and accretion		20,623			38,161			4,949			63,733
Ceiling test write-down of oil and natural gas properties		—			50,384			66,175			116,559
General and administrative expenses		6,613			9,830			—			16,443
Derivative gain		(2,493	)		—			—			(2,493	)
Total costs and expenses		51,767			121,438			71,124			244,329
Operating loss		(21,255	)		(74,235	)		(71,124	)		(166,614	)
Loss of affiliates		(73,029	)		—			73,029			—
Interest expense:
Incurred		27,695			119			—			27,814
Capitalized		(224	)		(119	)		—			(343	)
Other expense, net		1,306			—			—			1,306
Loss before income tax benefit		(123,061	)		(74,235	)		1,905			(195,391	)
Income tax benefit		(3,676	)		(1,206	)		—			(4,882	)
Net loss	$	(119,385	)	$	(73,029	)	$	1,905		$	(190,509	)

Condensed Consolidating Statement of Cash Flows

Condensed Consolidating Statement of Cash Flows for the Three Months Ended March 31, 2017

										Consolidated
										W&T
	Parent			Guarantor						Offshore,
	Company			Subsidiaries			Eliminations			Inc.
	(In thousands)
Operating activities:
Net income	$	25,030		$	17,527		$	(18,258	)	$	24,299
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, depletion, amortization and accretion		19,154			20,105			731			39,990
Amortization of debt items		412			—			—			412
Share-based compensation		1,928			—			—			1,928
Derivative gain		(3,955	)		—			—			(3,955	)
Cash receipts on derivative settlements, net		713			—			—			713
Deferred income taxes		105			—			—			105
Earnings of affiliates		(17,527	)		—			17,527			—
Changes in operating assets and liabilities:
Oil and natural gas receivables		(2,004	)		122			—			(1,882	)
Joint interest and other receivables		35,142			—			—			35,142
Income taxes		(5,451	)		5,451			—			—
Prepaid expenses and other assets		(6,927	)		(42,395	)		41,350			(7,972	)
Asset retirement obligation settlements		(12,940	)		(1,559	)		—			(14,499	)
Accounts payable, accrued liabilities and other		46,764			1,488			(41,350	)		6,902
Net cash provided by operating activities		80,444			739			—			81,183
Investing activities:
Investment in oil and natural gas properties and equipment		(23,593	)		255			—			(23,338	)
Changes in operating assets and liabilities associated with investing activities		2,162			(994	)		—			1,168
Purchases of furniture, fixtures and other		(853	)		—			—			(853	)
Net cash used in investing activities		(22,284	)		(739	)		—			(23,023	)
Financing activities:
Payment of interest on 1.5 Lien Term Loan		(2,056	)		—			—			(2,056	)
Other		(245	)		—			—			(245	)
Net cash provided by financing activities		(2,301	)		—			—			(2,301	)
Increase in cash and cash equivalents		55,859			—			—			55,859
Cash and cash equivalents, beginning of period		70,236			—			—			70,236
Cash and cash equivalents, end of period	$	126,095		$	—		$	—		$	126,095

Condensed Consolidating Statement of Cash Flows for the Three Months Ended March 31, 2016

										Consolidated
										W&T
	Parent			Guarantor						Offshore,
	Company			Subsidiaries			Eliminations			Inc.
	(In thousands)
Operating activities:
Net loss	$	(119,385	)	$	(73,029	)	$	1,905		$	(190,509	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation, depletion, amortization and accretion		20,623			38,161			4,949			63,733
Ceiling test write-down of oil and natural gas properties		—			50,384			66,175			116,559
Debt issuance costs write-off/ amortization of debt items		1,684			—			—			1,684
Share-based compensation		2,536			—			—			2,536
Derivative gain		(2,493	)		—			—			(2,493	)
Cash receipts on derivative settlements		4,105			—			—			4,105
Deferred income taxes		(3,676	)		(1,206	)		—			(4,882	)
Loss of affiliates		73,029			—			(73,029	)		—
Changes in operating assets and liabilities:
Oil and natural gas receivables		3,606			4,559			—			8,165
Joint interest and other receivables		4,991			—			—			4,991
Income taxes		(310	)		—			—			(310	)
Prepaid expenses and other assets		3,072			(7,492	)		5,737			1,317
Asset retirement obligations		(584	)		(2,596	)		—			(3,180	)
Accounts payable, accrued liabilities and other		14,761			18,969			(5,737	)		27,993
Net cash provided by operating activities		1,959			27,750			—			29,709
Investing activities:
Investment in oil and natural gas properties and equipment		(3,147	)		(9,756	)		—			(12,903	)
Changes in operating assets and liabilities associated with investing activities		(2,686	)		(17,994	)		—			(20,680	)
Proceeds from sales of assets and other, net		1,000			—			—			1,000
Net cash used in investing activities		(4,833	)		(27,750	)		—			(32,583	)
Financing activities:
Borrowings of long-term debt – revolving bank credit facility		340,000			—			—			340,000
Repayments of long-term debt – revolving bank credit facility		(52,000	)		—			—			(52,000	)
Other		83			—			—			83
Net cash provided by financing activities		288,083			—			—			288,083
Increase in cash and cash equivalents		285,209			—			—			285,209
Cash and cash equivalents, beginning of period		85,414			—			—			85,414
Cash and cash equivalents, end of period	$	370,623		$	—		$	—		$	370,623