(1)

in connection with any sale or other disposition of all or substantially all of the assets of a Guarantor Subsidiary (including by way of merger or consolidation) to a person that is not (either before or after giving effect to such transaction) the Company or a Restricted Subsidiary, if the sale or other disposition does not violate the Asset Sale provisions (as such capitalized terms are defined in the applicable indenture);

(2)

in connection with any sale or other disposition of the capital stock of such Guarantor Subsidiary to a person that is not (either before or after giving effect to such transaction) the Company or a Restricted Subsidiary of the Company, if the sale or other disposition does not violate the Asset Sale provisions of the indenture and the Guarantor Subsidiary ceases to be a subsidiary of the Company as a result of such sales or disposition;

(3)

if such Guarantor Subsidiary is a Restricted Subsidiary and the Company designates such Guarantor Subsidiary as an Unrestricted Subsidiary in accordance with the applicable provisions of certain debt documents;

(4)

upon Legal Defeasance or Covenant Defeasance (as such terms are defined in the applicable indenture) or upon satisfaction and discharge of the certain debt documents;

(5)

upon the liquidation or dissolution of such Guarantor Subsidiary, provided no event of default has occurred and is continuing; or

(6)

at such time as such Guarantor Subsidiary is no longer required to be a Guarantor Subsidiary as described in certain debt documents, provided no event of default has occurred and is continuing.

Consolidated

Parent

Guarantor

W&T

Company

Subsidiaries

Eliminations

Offshore, Inc.

Assets

Current assets:

Cash and cash equivalents

$

99,058

$

—

$

—

$

99,058

Receivables:

Oil and natural gas sales

5,665

39,778

—

45,443

Joint interest

19,754

—

—

19,754

Income taxes

128,835

—

(115,829

)

13,006

Total receivables

154,254

39,778

(115,829

)

78,203

Prepaid expenses and other assets

11,154

2,265

—

13,419

Total current assets

264,466

42,043

(115,829

)

190,680

Oil and natural gas properties and other, net - at cost:

430,354

152,464

(3,802

)

579,016

Restricted deposits for asset retirement obligations

25,394

—

—

25,394

Income tax receivables

52,097

—

—

52,097

Other assets

505,304

453,306

(898,217

)

60,393

Total assets

$

1,277,615

$

647,813

$

(1,017,848

)

$

907,580

Liabilities and Shareholders’ Equity (Deficit)

Current liabilities:

Accounts payable

$

76,703

$

6,962

$

—

$

83,665

Undistributed oil and natural gas proceeds

18,762

1,367

—

20,129

Asset retirement obligations

22,488

1,125

—

23,613

Long-term debt

22,925

—

—

22,925

Accrued liabilities

18,058

115,701

(115,829

)

17,930

Total current liabilities

158,936

125,155

(115,829

)

168,262

Long-term debt:

Principal

889,790

—

—

889,790

Carrying value adjustments

79,337

—

—

79,337

Long term debt, less current portion - carrying value

969,127

—

—

969,127

Asset retirement obligations, less current portion

152,883

123,950

—

276,833

Other liabilities

566,375

—

(499,509

)

66,866

Shareholders’ equity (deficit):

Common stock

1

—

—

1

Additional paid-in capital

545,820

704,885

(704,885

)

545,820

Retained earnings (deficit)

(1,091,360

)

(306,177

)

302,375

(1,095,162

)

Treasury stock, at cost

(24,167

)

—

—

(24,167

)

Total shareholders’ equity (deficit)

(569,706

)

398,708

(402,510

)

(573,508

)

Total liabilities and shareholders’ equity (deficit)

$

1,277,615

$

647,813

$

(1,017,848

)

$

907,580

Consolidated

Parent

Guarantor

W&T

Company

Subsidiaries

Eliminations

Offshore, Inc.

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’ Equity (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’ equity (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’ equity (deficit)

(658,084

)

337,264

(338,217

)

(659,037

)

Total liabilities and shareholders’ equity (deficit)

$

1,083,422

$

574,738

$

(828,434

)

$

829,726

Consolidated

Parent

Guarantor

W&T

Company

Subsidiaries

Eliminations

Offshore, Inc.

Revenues

$

231,396

$

255,700

$

—

$

487,096

Operating costs and expenses:

Lease operating expenses

79,695

64,043

—

143,738

Production taxes

1,740

—

—

1,740

Gathering and transportation

9,781

10,660

—

20,441

Depreciation, depletion and amortization

73,962

61,700

2,848

138,510

Asset retirement obligations accretion

7,416

9,756

—

17,172

General and administrative expenses

28,170

31,574

—

59,744

Derivative gain

(4,199

)

—

—

(4,199

)

Total costs and expenses

196,565

177,733

2,848

377,146

Operating Income

34,831

77,967

(2,848

)

109,950

Earnings of affiliates

61,444

—

(61,444

)

—

Interest expense incurred

45,836

—

—

45,836

Gain on exchange of debt

7,811

—

—

7,811

Other expense, net

4,812

—

—

4,812

Income before income tax expense (benefit)

53,438

77,967

(64,292

)

67,113

Income tax expense (benefit)

(29,092

)

16,523

—

(12,569

)

Net income

$

82,530

$

61,444

$

(64,292

)

$

79,682

Consolidated

Parent

Guarantor

W&T

Company

Subsidiaries

Eliminations

Offshore, Inc.

Revenues

$

161,063

$

238,923

$

—

$

399,986

Operating costs and expenses:

Lease operating expenses

84,415

67,984

—

152,399

Production taxes

1,889

—

—

1,889

Gathering and transportation

9,795

13,133

—

22,928

Depreciation, depletion and amortization

73,268

112,277

8,493

194,038

Asset retirement obligations accretion

8,165

9,406

—

17,571

Ceiling test write-down of oil and natural gas

   properties

28,305

110,709

140,049

279,063

General and administrative expenses

24,817

34,923

—

59,740

Derivative loss

2,926

—

—

2,926

Total costs and expenses

233,580

348,432

148,542

730,554

Operating loss

(72,517

)

(109,509

)

(148,542

)

(330,568

)

Loss of affiliates

(109,853

)

—

109,853

—

Interest expense:

Incurred

92,607

184

—

92,791

Capitalized

(336

)

(184

)

—

(520

)

Gain on exchange of debt

123,923

—

—

123,923

Other income, net

(6,520

)

—

—

(6,520

)

Loss before income tax expense (benefit)

(144,198

)

(109,509

)

(38,689

)

(292,396

)

Income tax expense (benefit)

(43,720

)

344

—

(43,376

)

Net loss

$

(100,478

)

$

(109,853

)

$

(38,689

)

$

(249,020

)

Consolidated

Parent

Guarantor

W&T

Company

Subsidiaries

Eliminations

Offshore, Inc.

Revenues

$

290,212

$

217,053

$

—

$

507,265

Operating costs and expenses:

Lease operating expenses

126,189

66,576

—

192,765

Production taxes

3,002

—

—

3,002

Gathering and transportation

9,209

7,948

—

17,157

Depreciation, depletion and amortization

201,154

172,214

—

373,368

Asset retirement obligations accretion

11,587

9,116

—

20,703

Ceiling test write-down of oil and natural gas

   properties

616,947

517,880

(147,589

)

987,238

General and administrative expenses

39,009

34,101

—

73,110

Derivative gain

(14,375

)

—

—

(14,375

)

Total costs and expenses

992,722

807,835

(147,589

)

1,652,968

Operating loss

(702,510

)

(590,782

)

147,589

(1,145,703

)

Loss of affiliates

(464,931

)

—

464,931

—

Interest expense:

Incurred

101,542

3,050

—

104,592

Capitalized

(4,206

)

(3,050

)

—

(7,256

)

Other expense, net

4,663

—

—

4,663

Loss before income tax benefit

(1,269,440

)

(590,782

)

612,520

(1,247,702

)

Income tax benefit

(77,133

)

(125,851

)

—

(202,984

)

Net loss

$

(1,192,307

)

$

(464,931

)

$

612,520

$

(1,044,718

)

Consolidated

Parent

Guarantor

W&T

Company

Subsidiaries

Eliminations

Offshore, Inc.

Operating activities:

Net income

$

82,530

$

61,444

$

(64,292

)

$

79,682

Adjustments to reconcile net income to net cash provided by

    operating activities:

Depreciation, depletion, amortization and accretion

81,378

71,456

2,848

155,682

Gain on exchange of debt

(7,811

)

—

—

(7,811

)

Amortization of debt items

1,715

—

—

1,715

Share-based compensation

7,191

—

—

7,191

Derivative gain

(4,199

)

—

—

(4,199

)

Cash receipts on derivative settlements, net

4,199

—

—

4,199

Deferred income taxes

217

—

—

217

Loss of affiliates

(61,444

)

—

61,444

—

Changes in operating assets and liabilities:

Oil and natural gas receivables

(3,491

)

1,121

—

(2,370

)

Joint interest receivables

2,131

—

—

2,131

Insurance reimbursements

31,740

—

—

31,740

Income taxes

(17,586

)

16,523

—

(1,063

)

Prepaid expenses and other assets

3,447

(108,773

)

108,564

3,238

Escrow deposit - Apache lawsuit

(49,500

)

—

—

(49,500

)

Asset retirement obligation settlements

(55,672

)

(16,737

)

—

(72,409

)

Accounts payable, accrued liabilities and other

127,496

(7,967

)

(108,564

)

10,965

Net cash provided by operating activities

142,341

17,067

—

159,408

Investing activities:

Investment in oil and natural gas properties and equipment

(105,179

)

(24,869

)

—

(130,048

)

Changes in operating assets and liabilities associated with

    investing activities

16,072

7,802

—

23,874

Purchases of furniture, fixtures and other

(933

)

—

—

(933

)

Net cash used in investing activities

(90,040

)

(17,067

)

—

(107,107

)

Financing activities:

Payment of interest on 1.5 Lien Term Loan

(8,227

)

—

—

(8,227

)

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

)

Debt exchange costs

(421

)

—

—

(421

)

Other

(1,295

)

—

—

(1,295

)

Net cash used in financing activities

(23,479

)

—

—

(23,479

)

Increase in cash and cash equivalents

28,822

—

—

28,822

Cash and cash equivalents, beginning of period

70,236

—

—

70,236

Cash and cash equivalents, end of period

$

99,058

$

—

$

—

$

99,058

Consolidated

Parent

Guarantor

W&T

Company

Subsidiaries

Eliminations

Offshore, Inc.

Operating activities:

Net loss

$

(100,478

)

$

(109,853

)

$

(38,689

)

$

(249,020

)

Adjustments to reconcile net loss to net cash

   provided by operating activities:

Depreciation, depletion, amortization and accretion

81,433

121,683

8,493

211,609

Ceiling test write-down of oil and gas properties

28,305

110,709

140,049

279,063

Gain on exchange of debt

(123,923

)

—

—

(123,923

)

Debt issuance costs write-down/amortization of debt items

2,548

—

—

2,548

Share-based compensation

11,013

—

—

11,013

Derivative gain

2,926

—

—

2,926

Cash payments on derivative settlements

4,746

—

—

4,746

Deferred income taxes

28,048

344

—

28,392

Loss of affiliates

109,853

—

(109,853

)

—

Changes in operating assets and liabilities:

Oil and natural gas receivables

1,630

(8,635

)

—

(7,005

)

Joint interest receivables

12

—

—

12

Income taxes

(64,274

)

—

—

(64,274

)

Prepaid expenses and other assets

(14,395

)

(78,547

)

77,996

(14,946

)

Asset retirement obligations

(49,303

)

(23,017

)

—

(72,320

)

Accounts payable, accrued liabilities and other

45,817

37,538

(77,996

)

5,359

Net cash provided by (used in) operating activities

(36,042

)

50,222

—

14,180

Investing activities:

Investment in oil and natural gas properties and equipment

(37,418

)

(11,188

)

—

(48,606

)

Changes in operating assets and liabilities associated with

   investing activities

4,340

(39,534

)

—

(35,194

)

Proceeds from sales of assets, net

1,000

500

—

1,500

Purchases of furniture, fixtures and other

(96

)

—

—

(96

)

Net cash used in investing activities

(32,174

)

(50,222

)

—

(82,396

)

Financing activities:

Borrowings of long-term debt – revolving bank credit facility

340,000

—

—

340,000

Repayments of long-term debt – revolving bank credit facility

(340,000

)

—

—

(340,000

)

Issuance of 1.5 Lien Term Loan

75,000

—

—

75,000

Payment of interest on 1.5 Lien Term Loan

(2,570

)

—

—

(2,570

)

Debt exchange costs

(18,464

)

—

—

(18,464

)

Other

(928

)