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, 2017

Supplemental Guarantor Information [Abstract]

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 June 30, 2017

										Consolidated
	Parent			Guarantor						W&T
	Company			Subsidiaries			Eliminations			Offshore, Inc.
	(In thousands)
Assets
Current assets:
Cash and cash equivalents	$	72,320		$	—		$	—		$	72,320
Receivables:
Oil and natural gas sales		3,268			36,129			—			39,397
Joint interest		19,920			—			—			19,920
Income taxes		119,732			—			(107,705	)		12,027
Total receivables		142,920			36,129			(107,705	)		71,344
Prepaid expenses and other assets		19,480			2,464			—			21,944
Total current assets		234,720			38,593			(107,705	)		165,608

Oil and natural gas properties and other, net		392,445			160,708			(2,472	)		550,681

Restricted deposits for asset retirement obligations		28,712			—			—			28,712
Income tax receivables		68,974			—			—			68,974
Other assets		481,201			418,924			(839,129	)		60,996
Total assets	$	1,206,052		$	618,225		$	(949,306	)	$	874,971
Liabilities and Shareholders’ Equity (Deficit)
Current liabilities:
Accounts payable	$	51,932		$	6,351		$	—		$	58,283
Undistributed oil and natural gas proceeds		19,626			1,644			—			21,270
Asset retirement obligations		44,776			7,656			—			52,432
Long-term debt		11,147			—			—			11,147
Accrued liabilities		13,122			107,705			(107,705	)		13,122
Total current liabilities		140,603			123,356			(107,705	)		156,254
Long-term debt:
Principal		873,733			—			—			873,733
Carrying value adjustments		110,604			—			—			110,604
Long term debt, less current portion - carrying value		984,337			—			—			984,337

Asset retirement obligations, less current portion		144,292			121,136			—			265,428
Other liabilities		532,305			—			(465,396	)		66,909
Shareholders’ deficit:
Common stock		1			—			—			1
Additional paid-in capital		543,439			704,885			(704,885	)		543,439
Retained earnings (deficit)		(1,114,758	)		(331,152	)		328,680			(1,117,230	)
Treasury stock, at cost		(24,167	)		—			—			(24,167	)
Total shareholders’ equity (deficit)		(595,485	)		373,733			(376,205	)		(597,957	)
Total liabilities and shareholders’ equity (deficit)	$	1,206,052		$	618,225		$	(949,306	)	$	874,971

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 June 30, 2017

									Consolidated
	Parent			Guarantor					W&T
	Company			Subsidiaries		Eliminations			Offshore, Inc.
	(In thousands)
Revenues	$	57,417		$	65,906	$	—		$	123,323
Operating costs and expenses:
Lease operating expenses		17,325			14,194		—			31,519
Production taxes		449			—		—			449
Gathering and transportation		2,578			2,740		—			5,318
Depreciation, depletion, amortization and accretion		21,433			18,143		788			40,364
General and administrative expenses		7,662			8,812		—			16,474
Derivative gain		(3,689	)		—		—			(3,689	)
Total costs and expenses		45,758			43,889		788			90,435
Operating income		11,659			22,017		(788	)		32,888
Earnings of affiliates		18,941			—		(18,941	)		—
Interest expense incurred		11,436			—		—			11,436
Gain on exchange of debt		8,056			—		—			8,056
Other expense, net		5,168			—		—			5,168
Income before income tax benefit		22,052			22,017		(19,729	)		24,340
Income tax benefit		(12,051	)		3,076		—			(8,975	)
Net income	$	34,103		$	18,941	$	(19,729	)	$	33,315

Condensed Consolidating Statement of Operations for the Six Months Ended June 30, 2017

									Consolidated
	Parent			Guarantor					W&T
	Company			Subsidiaries		Eliminations			Offshore, Inc.
	(In thousands)
Revenues	$	111,124		$	136,592	$	—		$	247,716
Operating costs and expenses:
Lease operating expenses		41,027			30,656		—			71,683
Production taxes		964			—		—			964
Gathering and transportation		5,144			6,383		—			11,527
Depreciation, depletion, amortization and accretion		40,587			38,248		1,519			80,354
General and administrative expenses		13,438			16,310		—			29,748
Derivative gain		(7,644	)		—		—			(7,644	)
Total costs and expenses		93,516			91,597		1,519			186,632
Operating income		17,608			44,995		(1,519	)		61,084
Earnings of affiliates		36,468			—		(36,468	)		—
Interest expense incurred		22,730			—		—			22,730
Gain on exchange of debt		7,811			—		—			7,811
Other expense, net		5,114			—		—			5,114
Income before income tax benefit		34,043			44,995		(37,987	)		41,051
Income tax benefit		(25,090	)		8,527		—			(16,563	)
Net income	$	59,133		$	36,468	$	(37,987	)	$	57,614

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, 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
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 Cash Flows

Condensed Consolidating Statement of Cash Flows for the Six Months Ended June 30, 2017

										Consolidated
										W&T
	Parent			Guarantor						Offshore,
	Company			Subsidiaries			Eliminations			Inc.
	(In thousands)
Operating activities:
Net income	$	59,133		$	36,468		$	(37,987	)	$	57,614
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, depletion, amortization and accretion		40,587			38,248			1,519			80,354
Gain on exchange of debt		(7,811	)		—			—			(7,811	)
Amortization of debt items		836			—			—			836
Share-based compensation		3,466			—			—			3,466
Derivative gain		(7,644	)		—			—			(7,644	)
Cash receipts on derivative settlements, net		2,208			—			—			2,208
Deferred income taxes		212			—			—			212
Earnings of affiliates		(36,468	)		—			36,468			—
Changes in operating assets and liabilities:
Oil and natural gas receivables		(1,095	)		4,770			—			3,675
Joint interest receivables		1,965			—			—			1,965
Insurance reimbursements		30,100			—			—			30,100
Income taxes		(25,487	)		8,527			—			(16,960	)
Prepaid expenses and other assets		(3,165	)		(74,591	)		74,181			(3,575	)
Escrow deposit - Apache lawsuit		(49,500	)		—			—			(49,500	)
Asset retirement obligation settlements		(25,044	)		(10,977	)		—			(36,021	)
Accounts payable, accrued liabilities and other		81,785			(938	)		(74,181	)		6,666
Net cash provided by operating activities		64,078			1,507			—			65,585
Investing activities:
Investment in oil and natural gas properties and equipment		(41,854	)		(1,946	)		—			(43,800	)
Changes in operating assets and liabilities associated with investing activities		(1,266	)		439			—			(827	)
Purchases of furniture, fixtures and other		(853	)		—			—			(853	)
Net cash used in investing activities		(43,973	)		(1,507	)		—			(45,480	)
Financing activities:
Payment of interest on 1.5 Lien Term Loan		(4,113	)		—			—			(4,113	)
Payment of interest on 2nd Lien PIK Toggle Notes		(7,335	)		—			—			(7,335	)
Payment of interest on 3rd Lien PIK Toggle Notes		(6,201	)		—			—			(6,201	)
Other		(372	)		—			—			(372	)
Net cash provided by financing activities		(18,021	)		—			—			(18,021	)
Increase in cash and cash equivalents		2,084			—			—			2,084
Cash and cash equivalents, beginning of period		70,236			—			—			70,236
Cash and cash equivalents, end of period	$	72,320		$	—		$	—		$	72,320

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 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 gain		2,449			—			—			2,449
Cash receipts on derivative settlements		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 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 obligations		(12,702	)		(12,454	)		—			(25,156	)
Accounts payable, accrued liabilities and other		(783	)		32,014			(16,464	)		14,767
Net cash provided by 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