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

Supplemental Guarantor Information

6 Months Ended

Jun. 30, 2011

14. Supplemental Guarantor Information

Our payment obligations under the 8.5% Senior Notes, the 8.25% Senior Notes and the Credit Agreement (see Note 6) are fully and unconditionally guaranteed by certain of our wholly-owned subsidiaries, Energy VI and W&T Energy VII, which does not have any active operations, (together, the "Guarantor Subsidiaries").

The following unaudited condensed consolidating financial information presents the financial condition, results of operations and cash flows of W&T Offshore, Inc. and other consolidated subsidiaries ("Parent Company") and the Guarantor Subsidiaries, together with consolidating adjustments necessary to present the Company's results on a consolidated basis. Consolidated subsidiaries other than the Guarantor Subsidiaries are considered "minor" under applicable accounting rules of the SEC.

Condensed Consolidating Balance Sheet as of June 30, 2011


	Parent Company			Guarantor Subsidiaries		Eliminations			Consolidated W&T Offshore, Inc.
	(In thousands)
Assets
Current assets:
Cash and cash equivalents	$	8,710		$	—	$	—		$	8,710
Receivables:
Oil and natural gas sales		69,201			22,316		—			91,517
Joint interest and other		11,308			—		—			11,308
Insurance		6,925			—		—			6,925
Income taxes		45,830			—		(45,830	)		—

Total receivables		133,264			22,316		(45,830	)		109,750
Deferred income taxes		—			9,183		(9,183	)		—
Prepaid expenses and other assets		44,153			—		—			44,153

Total current assets		186,127			31,499		(55,013	)		162,613
Property and equipment – at cost:
Oil and natural gas properties and equipment		5,435,135			272,493		—			5,707,628
Furniture, fixtures and other		16,018			—		—			16,018

Total property and equipment		5,451,153			272,493		—			5,723,646
Less accumulated depreciation, depletion and amortization		4,094,280			68,733		—			4,163,013

Net property and equipment		1,356,873			203,760		—			1,560,633
Restricted deposits for asset retirement obligations		33,921			—		—			33,921
Other assets		325,119			155,804		(465,626	)		15,297

Total assets	$	1,902,040		$	391,063	$	(520,639	)	$	1,772,464

Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable	$	64,285		$	1,351	$	—		$	65,636
Undistributed oil and natural gas proceeds		35,937			326		—			36,263
Asset retirement obligations		105,348			—		31			105,379
Accrued liabilities		23,331			—		—			23,331
Income taxes		—			48,426		(45,830	)		2,596
Deferred income taxes – current		2,249			—		—			2,249
Long-term debt - current		43,850			—		—			43,850

Total current liabilities		275,000			50,103		(45,799	)		279,304
Long-term debt		675,000			—		—			675,000
Asset retirement obligations, less current portion		256,593			31,136		(30	)		287,699
Deferred income taxes		33,989			—		(9,183	)		24,806
Other liabilities		168,186			—		(155,803	)		12,383
Commitments and contingencies		—			—		—			—
Shareholders' equity:
Common stock		1			—		—			1
Additional paid-in capital		381,191			236,944		(236,944	)		381,191
Retained earnings		136,247			72,880		(72,880	)		136,247
Treasury stock, at cost		(24,167	)		—		—			(24,167	)

Total shareholders' equity		493,272			309,824		(309,824	)		493,272

Total liabilities and shareholders' equity	$	1,902,040		$	391,063	$	(520,639	)	$	1,772,464

Condensed Consolidating Balance Sheet as of December 31, 2010


	Parent Company			Guarantor Subsidiaries		Eliminations			Consolidated W&T Offshore, Inc.
	(In thousands)
Assets
Current assets:
Cash and cash equivalents	$	28,655		$	—	$	—		$	28,655
Receivables:
Oil and natural gas sales		50,421			29,490		—			79,911
Joint interest and other		25,415			—		—			25,415
Insurance		1,014			—		—			1,014
Income taxes		2,492			—		(2,492	)		—

Total receivables		79,342			29,490		(2,492	)		106,340
Deferred income taxes		5,784			2,755		(2,755	)		5,784
Prepaid expenses and other assets		23,426			—		—			23,426

Total current assets		137,207			32,245		(5,247	)		164,205
Property and equipment – at cost:
Oil and natural gas properties and equipment		4,955,460			270,122		—			5,225,582
Furniture, fixtures and other		15,841			—		—			15,841

Total property and equipment		4,971,301			270,122		—			5,241,423
Less accumulated depreciation, depletion and amortization		3,994,085			27,310		—			4,021,395

Net property and equipment		977,216			242,812		—			1,220,028
Restricted deposits for asset retirement obligations		30,636			—		—			30,636
Deferred income taxes		2,819			—		—			2,819
Other assets		275,461			47,160		(316,215	)		6,406

Total assets	$	1,423,339		$	322,217	$	(321,462	)	$	1,424,094

Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable	$	77,422		$	3,020	$	—		$	80,442
Undistributed oil and natural gas proceeds		24,866			374		—			25,240
Asset retirement obligations		92,575			—		—			92,575
Accrued liabilities		25,827			—		—			25,827
Income taxes		—			20,044		(2,492	)		17,552

Total current liabilities		220,690			23,438		(2,492	)		241,636
Long-term debt		450,000			—		—			450,000
Asset retirement obligations, less current portion		269,016			29,725		—			298,741
Deferred income taxes		2,755			—		(2,755	)		—
Other liabilities		59,135			—		(47,161	)		11,974
Commitments and contingencies		—			—		—			—
Shareholders' equity:
Common stock		1			—		—			1
Additional paid-in capital		377,529			236,944		(236,944	)		377,529
Retained earnings		68,380			32,110		(32,110	)		68,380
Treasury stock, at cost		(24,167	)		—		—			(24,167	)

Total shareholders' equity		421,743			269,054		(269,054	)		421,743

Total liabilities and shareholders' equity	$	1,423,339		$	322,217	$	(321,462	)	$	1,424,094

Condensed Consolidating Statement of Income for the Three Months Ended June 30, 2011


	Parent Company			Guarantor Subsidiaries		Eliminations			Consolidated W&T Offshore, Inc.
	(In thousands)
Revenues	$	192,527		$	60,395	$	—		$	252,922

Operating costs and expenses:
Lease operating expenses		38,066			10,531		—			48,597
Production taxes		845			—		—			845
Gathering and transportation		3,249			548		—			3,797
Depreciation, depletion and amortization		56,432			19,448		—			75,880
Asset retirement obligation accretion		6,784			706		—			7,490
General and administrative expenses		16,892			1,110		—			18,002
Derivative (gain)		(17,332	)		—		—			(17,332	)

Total costs and expenses		104,936			32,343		—			137,279

Operating income		87,591			28,052		—			115,643
Earnings of affiliates		18,234			—		(18,234	)		—
Interest expense:
Incurred		12,056			—		—			12,056
Capitalized		(2,079	)		—		—			(2,079	)
Loss on extinguishment of debt		20,663			—		—			20,663
Interest income		9			—		—			9

Income before income tax expense		75,194			28,052		(18,234	)		85,012
Income tax expense		20,019			9,818		—			29,837

Net income	$	55,175		$	18,234	$	(18,234	)	$	55,175

Condensed Consolidating Statement of Income for the Six Months Ended June 30, 2011


	Parent Company			Guarantor Subsidiaries		Eliminations			Consolidated W&T Offshore, Inc.
	(In thousands)
Revenues	$	332,753		$	131,024	$	—		$	463,777

Operating costs and expenses:
Lease operating expenses		80,147			20,855		—			101,002
Production taxes		1,133			—		—			1,133
Gathering and transportation		6,321			2,029		—			8,350
Depreciation, depletion and amortization		100,195			41,423		—			141,618
Asset retirement obligation accretion		14,432			1,412		—			15,844
General and administrative expenses		33,549			2,582		—			36,131
Derivative loss		6,508			—		—			6,508

Total costs and expenses		242,285			68,301		—			310,586

Operating income		90,468			62,723		—			153,191
Earnings of affiliates		40,770			—		(40,770	)		—
Interest expense:
Incurred		22,192			—		—			22,192
Capitalized		(3,491	)		—		—			(3,491	)
Loss on extinguishment of debt		20,663			—		—			20,663
Interest income		16			—		—			16

Income before income tax expense		91,890			62,723		(40,770	)		113,843
Income tax expense		18,066			21,953		—			40,019

Net income	$	73,824		$	40,770	$	(40,770	)	$	73,824

Condensed Consolidating Statement of Income for the Three Months Ended June 30, 2010


	Parent Company			Guarantor Subsidiaries (1)		Eliminations			Consolidated W&T Offshore, Inc.
	(In thousands)
Revenues	$	160,511		$	19,156	$	—		$	179,667

Operating costs and expenses:
Lease operating expenses		46,546			5,911		—			52,457
Production taxes		283			—		—			283
Gathering and transportation		3,512			214		—			3,726
Depreciation, depletion and amortization		63,831			6,064		—			69,895
Asset retirement obligation accretion		6,031			96		—			6,127
General and administrative expenses		13,102			1,273		—			14,375
Derivative (gain)		(7,374	)		—		—			(7,374	)

Total costs and expenses		125,931			13,558		—			139,489

Operating income		34,580			5,598		—			40,178
Earnings of affiliates		3,639			—		(3,639	)		—
Interest expense:
Incurred		10,914			—		—			10,914
Capitalized		(1,329	)		—		—			(1,329	)
Interest income		354			—		—			354

Income before income tax expense		28,988			5,598		(3,639	)		30,947
Income tax expense		1,118			1,959		—			3,077

Net income	$	27,870		$	3,639	$	(3,639	)	$	27,870

(1)	Began operations on May 1, 2010. Includes only May and June of 2010.

Condensed Consolidating Statement of Income for the Six Months Ended June 30, 2010


	Parent Company			Guarantor Subsidiaries (1)		Eliminations			Consolidated W&T Offshore, Inc.
	(In thousands)
Revenues	$	330,096		$	19,156	$	—		$	349,252

Operating costs and expenses:
Lease operating expenses		81,912			5,911		—			87,823
Production taxes		512			—		—			512
Gathering and transportation		8,099			214		—			8,313
Depreciation, depletion and amortization		126,755			6,064		—			132,819
Asset retirement obligation accretion		12,316			96		—			12,412
General and administrative expenses		23,481			1,273		—			24,754
Derivative (gain)		(13,270	)		—		—			(13,270	)

Total costs and expenses		239,805			13,558		—			253,363

Operating income		90,291			5,598		—			95,889
Earnings of affiliates		3,639			—		(3,639	)		—
Interest expense:
Incurred		21,834			—		—			21,834
Capitalized		(2,745	)		—		—			(2,745	)
Interest income		482			—		—			482

Income before income tax expense		75,323			5,598		(3,639	)		77,282
Income tax expense		5,138			1,959		—			7,097

Net income	$	70,185		$	3,639	$	(3,639	)	$	70,185

(1)	Began operations on May 1, 2010. Includes only May and June of 2010.

Condensed Consolidating Statement of Cash Flows for the Six Months Ended June 30, 2011


	Parent Company			Guarantor Subsidiaries			Eliminations			Consolidated W&T Offshore, Inc.
	(In thousands)
Operating activities:
Net income	$	73,824		$	40,770		$	(40,770	)	$	73,824
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, depletion, amortization and accretion		114,627			42,835			—			157,462
Amortization of debt issuance costs and discount on indebtedness		815			—			—			815
Loss on extinguishment of debt		20,663			—			—			20,663
Share-based compensation		3,662			—			—			3,662
Derivative loss		6,508			—			—			6,508
Cash payments on derivative settlements		(8,322	)		—			—			(8,322	)
Deferred income taxes		42,154			(6,428	)		—			35,726
Earnings of affiliates		(40,770	)		—			40,770			—
Changes in operating assets and liabilities:
Oil and natural gas receivables		(18,779	)		7,173			—			(11,606	)
Joint interest and other receivables		14,107			—			—			14,107
Insurance receivables		12,583			—			—			12,583
Income taxes		(43,339	)		28,382			—			(14,957	)
Prepaid expenses and other assets		(24,650	)		(108,643	)		108,643			(24,650	)
Asset retirement obligations		(29,703	)		—			—			(29,703	)
Accounts payable and accrued liabilities		(4,665	)		(1,717	)		—			(6,382	)
Other liabilities		108,758			—			(108,643	)		115

Net cash provided by operating activities		227,473			2,372			—			229,845

Investing activities:
Acquisition of significant property interest in oil and natural gas properties		(396,976	)		—			—			(396,976	)
Investment in oil and natural gas properties and equipment		(83,429	)		(2,372	)		—			(85,801	)
Purchases of furniture, fixtures and other		(178	)		—			—			(178	)

Net cash used in investing activities		(480,583	)		(2,372	)		—			(482,955	)

Financing activities:
Issuance of 8.5% Senior Notes		600,000			—			—			600,000
Repurchase of 8.25% Senior Notes		(406,150	)		—			—			(406,150	)
Borrowings of long-term debt – revolving bank credit facility		310,000			—			—			310,000
Repayments of long-term debt – revolving bank credit facility		(235,000	)		—			—			(235,000	)
Repurchase premium and debt issuance costs		(29,728	)		—			—			(29,728	)
Dividends to shareholders		(5,957	)		—			—			(5,957	)

Net cash provided by (used in) financing activities		233,165			—			—			233,165

Increase in cash and cash equivalents		(19,945	)		—			—			(19,945	)
Cash and cash equivalents, beginning of period		28,655			—			—			28,655

Cash and cash equivalents, end of period	$	8,710		$	—		$	—		$	8,710

Condensed Consolidating Statement of Cash Flows for the Six Months Ended June 30, 2010


	Parent Company			Guarantor Subsidiaries (1)			Eliminations			Consolidated W&T Offshore, Inc.
	(In thousands)
Operating activities:
Net income	$	70,185		$	3,639		$	(3,639	)	$	70,185
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, depletion, amortization and accretion		139,071			6,160			—			145,231
Amortization of debt issuance costs and discount on indebtedness		669			—			—			669
Share-based compensation		1,943			—			—			1,943
Derivative gain		(13,270	)		—			—			(13,270	)
Cash payments on derivative settlements		(442	)		—			—			(442	)
Deferred income taxes		144			2,801			—			2,945
Earnings of affiliates		(3,639	)		—			3,639			—
Changes in operating assets and liabilities:
Oil and natural gas receivables		(2,140	)		(9,599	)		—			(11,739	)
Joint interest and other receivables		21,931			—			—			21,931
Insurance receivables		29,879			—			—			29,879
Income taxes		92,355			(842	)		—			91,513
Prepaid expenses and other assets		(9,129	)		(5,154	)		5,154			(9,129	)
Asset retirement obligations		(35,210	)		—			—			(35,210	)
Accounts payable and accrued liabilities		(65,537	)		2,995			—			(62,542	)
Other liabilities		17,508			—			(5,154	)		12,354

Net cash provided by operating activities		244,318			—			—			244,318

Investing activities:
Acquisition of significant property interests in oil and natural gas properties		—			(116,589	)		—			(116,589	)
Investment in oil and natural gas properties and equipment		(89,705	)		—			—			(89,705	)
Proceeds from sales of oil and natural gas properties and equipment		1,335			—			—			1,335
Investment in subsidiary		(116,589	)		—			116,589			—
Purchases of furniture, fixtures and other		(167	)		—			—			(167	)

Net cash used in investing activities		(205,126	)		(116,589	)		116,589			(205,126	)

Financing activities:
Borrowings of long-term debt – revolving bank credit facility		285,000			—			—			285,000
Repayments of long-term debt – revolving bank credit facility		(285,000	)		—			—			(285,000	)
Dividends to shareholders		(4,481	)		—			—			(4,481	)
Investment from parent		—			116,589			(116,589	)		—

Net cash provided by (used in) financing activities		(4,481	)		116,589			(116,589	)		(4,481	)

Increase in cash and cash equivalents		34,711			—			—			34,711
Cash and cash equivalents, beginning of period		38,187			—			—			38,187

Cash and cash equivalents, end of period	$	72,898		$	—		$	—		$	72,898

(1)	Began operations on May 1, 2010. Includes only May and June of 2010.