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, 2018

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 a result of the JV Drilling Program, we recorded proportional consolidation adjustments, which are not considered a guarantor asset under our debt agreements and, accordingly, are reported as non-guarantor adjustments in the following tables. Due to the methodology of recording the ceiling-test write down in prior periods, consolidating adjustments are required to present the consolidated results appropriately.

Condensed Consolidating Balance Sheet as of March 31, 2018

													Consolidated
	Parent			Guarantor			Non-Guarantor						W&T
	Company			Subsidiaries			Adjustments			Eliminations			Offshore, Inc.
	(In thousands)
Assets
Current assets:
Cash and cash equivalents	$	130,711		$	—		$	—		$	—		$	130,711
Receivables:
Oil and natural gas sales		3,842			41,100			—			—			44,942
Joint interest		17,835			—			—			—			17,835
Income taxes		186,134			—			—			(121,031	)		65,103
Total receivables		207,811			41,100			—			(121,031	)		127,880
Prepaid expenses and other assets		14,592			3,206			2,399			—			20,197
Total current assets		353,114			44,306			2,399			(121,031	)		278,788

Oil and natural gas properties and other, net		406,308			128,745			44,947			(6,648	)		573,352

Restricted deposits for asset retirement obligations		25,622			—			—			—			25,622
Other assets		577,871			503,839			(46,378	)		(970,918	)		64,414
Total assets	$	1,362,915		$	676,890		$	968		$	(1,098,597	)	$	942,176
Liabilities and Shareholders’ Equity (Deficit)
Current liabilities:
Accounts payable	$	70,997		$	5,477		$	970		$	—		$	77,444
Undistributed oil and natural gas proceeds		20,598			1,675			—			—			22,273
Asset retirement obligations		23,635			2,113			—			—			25,748
Long-term debt		22,858			—			—			—			22,858
Accrued liabilities		23,437			120,887			—			(121,031	)		23,293
Total current liabilities		161,525			130,152			970			(121,031	)		171,616
Long-term debt:
Principal		889,790			—			—			—			889,790
Carrying value adjustments		77,691			—			—			—			77,691
Long term debt, less current portion - carrying value		967,481			—			—			—			967,481

Asset retirement obligations, less current portion		154,861			125,862			12			—			280,735
Other liabilities		617,034			—			—			(550,041	)		66,993
Shareholders’ deficit:
Common stock		1			—			—			—			1
Additional paid-in capital		547,039			704,885			—			(704,885	)		547,039
Retained earnings (deficit)		(1,060,859	)		(284,009	)		(14	)		277,360			(1,067,522	)
Treasury stock, at cost		(24,167	)		—			—			—			(24,167	)
Total shareholders’ equity (deficit)		(537,986	)		420,876			(14	)		(427,525	)		(544,649	)
Total liabilities and shareholders’ equity (deficit)	$	1,362,915		$	676,890		$	968		$	(1,098,597	)	$	942,176

Condensed Consolidating Balance Sheet as of December 31, 2017

										Consolidated
	Parent			Guarantor						W&T
	Company			Subsidiaries			Eliminations			Offshore, Inc.
	(In thousands)
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		430,354			152,464			(3,802	)		579,016

Restricted deposits for asset retirement obligations		25,394			—			—			25,394
Income taxes receivable		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’ 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’ 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’ deficit		(569,706	)		398,708			(402,510	)		(573,508	)
Total liabilities and shareholders’ deficit	$	1,277,615		$	647,813		$	(1,017,848	)	$	907,580

Condensed Consolidating Statement of Operations

Condensed Consolidating Statement of Operations for the Three Months Ended March 31, 2018

												Consolidated
	Parent			Guarantor		Non-Guarantor						W&T
	Company			Subsidiaries		Adjustments			Eliminations			Offshore, Inc.
	(In thousands)

Revenues	$	63,786		$	70,427	$	—		$	—		$	134,213
Operating costs and expenses:
Lease operating expenses		19,760			17,083		—			—			36,843
Production taxes		455			—		—			—			455
Gathering and transportation		2,703			2,354		—			—			5,057
Depreciation, depletion, amortization and accretion		19,420			15,814		—			2,847			38,081
General and administrative expenses		7,203			7,824		11			—			15,038
Total costs and expenses		49,541			43,075		11			2,847			95,474
Operating income		14,245			27,352		(11	)		(2,847	)		38,739
Earnings of affiliates		22,167			—		—			(22,167	)		—
Interest expense incurred		11,323			—		—			—			11,323
Other (income) expense, net		(336	)		—		3			—			(333	)
Income before income tax expense (benefit)		25,425			27,352		(14	)		(25,014	)		27,749
Income tax expense (benefit)		(5,076	)		5,185		—			—			109
Net income	$	30,501		$	22,167	$	(14	)	$	(25,014	)	$	27,640

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 expense (benefit)		11,991			22,978		(18,258	)		16,711
Income tax expense (benefit)		(13,039	)		5,451		—			(7,588	)
Net income	$	25,030		$	17,527	$	(18,258	)	$	24,299

Condensed Consolidating Statement of Cash Flows

Condensed Consolidating Statement of Cash Flows for the Three Months Ended March 31, 2018

													Consolidated
													W&T
	Parent			Guarantor			Non-Guarantor						Offshore,
	Company			Subsidiaries			Adjustments			Eliminations			Inc.
	(In thousands)
Operating activities:
Net income	$	30,501		$	22,167		$	(14	)	$	(25,014	)	$	27,640
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, depletion, amortization and accretion		19,420			15,814			—			2,847			38,081
Amortization of debt items		466			—			—			—			466
Share-based compensation		1,219			—			—			—			1,219
Deferred income taxes		109			—			—			—			109
Earnings of affiliates		(22,167	)		—			—			22,167			—
Changes in operating assets and liabilities:											—
Oil and natural gas receivables		1,823			(1,322	)		—			—			501
Joint interest receivables		1,919			—			—			—			1,919
Income taxes		(5,186	)		5,186			—			—			—
Prepaid expenses and other assets		25,275			(31,783	)		1,991			(1,874	)		(6,391	)
Asset retirement obligation settlements		(5,633	)		(1,389	)		—			—			(7,022	)
Cash advances from JV partners		13,129			6,018			—			—			19,147
Accounts payable, accrued liabilities and other		2,403			(4,965	)		-			1,874			(688	)
Net cash provided by operating activities		63,278			9,726			1,977			—			74,981
Investing activities:
Investment in oil and natural gas properties and equipment		(10,674	)		(7,496	)		(2,947	)		—			(21,117	)
Changes in operating assets and liabilities associated with investing activities		(15,894	)		(2,230	)		970			—			(17,154	)
Deposit for acquisition		(3,000	)		—			—			—			(3,000	)
Net cash used in investing activities		(29,568	)		(9,726	)		(1,977	)		—			(41,271	)
Financing activities:
Payment of interest on 1.5 Lien Term Loan		(2,057	)		—			—			—			(2,057	)
Net cash used in financing activities		(2,057	)		—			—			—			(2,057	)
Increase in cash and cash equivalents		31,653			—			—			—			31,653
Cash and cash equivalents, beginning of period		99,058			—			—			—			99,058
Cash and cash equivalents, end of period	$	130,711		$	—		$	—		$	—		$	130,711

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 loss 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		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 receivables		5,042			—			—			5,042
Insurance reimbursements		30,100			—			—			30,100
Income taxes		(5,451	)		5,451			—			—
Prepaid expenses and other assets		(6,927	)		(42,395	)		41,350			(7,972	)
Asset retirement obligations		(12,940	)		(1,559	)		—			(14,499	)
Cash advances from JV partners		(2,531	)		—			—			(2,531	)
Accounts payable, accrued liabilities and other		49,295			1,488			(41,350	)		9,433
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, cash equivalents and restricted cash		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