(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

Non-Guarantor

W&T

Company

Subsidiaries

Adjustments

Eliminations

Offshore, Inc.

(In thousands)

Assets

Current assets:

Cash and cash equivalents

$

129,440

$

—

$

—

$

—

$

129,440

Receivables:

Oil and natural gas sales

8,109

44,161

(197

)

—

52,073

Joint interest

19,366

—

—

—

19,366

Income taxes

193,594

—

—

(128,354

)

65,240

Total receivables

221,069

44,161

(197

)

(128,354

)

136,679

Prepaid expenses and other assets

16,739

3,700

31

—

20,470

Total current assets

367,248

47,861

(166

)

(128,354

)

286,589

Oil and natural gas properties and other, net

416,539

121,075

48,003

(9,544

)

576,073

Restricted deposits for asset retirement obligations

26,072

—

—

—

26,072

Other assets

607,463

544,029

(46,464

)

(1,035,610

)

69,418

Total assets

$

1,417,322

$

712,965

$

1,373

$

(1,173,508

)

$

958,152

Liabilities and Shareholders’ Equity (Deficit)

Current liabilities:

Accounts payable

$

38,445

$

6,457

$

1,562

$

—

$

46,464

Undistributed oil and natural gas proceeds

21,390

1,259

—

—

22,649

Asset retirement obligations

21,663

6,260

—

—

27,923

Current maturities of long-term debt:

Principal

189,829

—

—

—

189,829

Carrying value adjustments

34,917

—

—

—

34,917

Current maturities of long-term debt  -

   carrying value

224,746

—

—

—

224,746

Accrued liabilities

20,523

128,336

—

(128,354

)

20,505

Total current liabilities

326,767

142,312

1,562

(128,354

)

342,287

Long-term debt:

Principal

713,365

—

—

—

713,365

Carrying value adjustments

47,605

—

—

—

47,605

Long term debt, less current portion -

  carrying value

760,970

—

—

—

760,970

Asset retirement obligations, less current portion

164,010

125,275

12

—

289,297

Other liabilities

663,239

—

—

(590,232

)

73,007

Shareholders’ deficit:

Common stock

1

—

—

—

1

Additional paid-in capital

548,196

704,885

—

(704,885

)

548,196

Retained earnings (deficit)

(1,021,694

)

(259,507

)

(201

)

249,963

(1,031,439

)

Treasury stock, at cost

(24,167

)

—

—

—

(24,167

)

Total shareholders’ equity (deficit)

(497,664

)

445,378

(201

)

(454,922

)

(507,409

)

Total liabilities and shareholders’ equity (deficit)

$

1,417,322

$

712,965

$

1,373

$

(1,173,508

)

$

958,152

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

Current maturities of long-term debt  - carrying value

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

Consolidated

Parent

Guarantor

Non-Guarantor

W&T

Company

Subsidiaries

Adjustments

Eliminations

Offshore, Inc.

(In thousands)

Revenues

$

77,270

$

71,873

$

469

$

—

$

149,612

Operating costs and expenses:

Lease operating expenses

21,617

13,929

36

—

35,582

Production taxes

439

—

—

—

439

Gathering and transportation

2,834

2,084

10

—

4,928

Depreciation, depletion, amortization

   and accretion

19,954

16,743

164

2,896

39,757

General and administrative expenses

6,854

7,166

200

—

14,220

Derivative gain

6,219

—

—

—

6,219

Total costs and expenses

57,917

39,922

410

2,896

101,145

Operating income

19,353

31,951

59

(2,896

)

48,467

Earnings of affiliates

24,502

—

—

(24,502

)

—

Interest expense

12,147

—

—

—

12,147

Other (income) expense, net

(121

)

—

246

—

125

Income before income tax

   expense (benefit)

31,829

31,951

(187

)

(27,398

)

36,195

Income tax expense (benefit)

(7,337

)

7,449

—

—

112

Net income

$

39,166

$

24,502

$

(187

)

$

(27,398

)

$

36,083

Consolidated

Parent

Guarantor

Non-Guarantor

W&T

Company

Subsidiaries

Adjustments

Eliminations

Offshore, Inc.

(In thousands)

Revenues

$

141,056

$

142,300

$

469

$

—

$

283,825

Operating costs and expenses:

Lease operating expenses

41,377

31,012

36

—

72,425

Production taxes

894

—

—

—

894

Gathering and transportation

5,537

4,438

10

—

9,985

Depreciation, depletion, amortization and accretion

39,374

32,557

164

5,743

77,838

General and administrative expenses

14,057

14,990

211

—

29,258

Derivative gain

6,219

—

—

—

6,219

Total costs and expenses

107,458

82,997

421

5,743

196,619

Operating income

33,598

59,303

48

(5,743

)

87,206

Earnings of affiliates

46,669

—

—

(46,669

)

—

Interest expense

23,470

—

—

—

23,470

Other (income) expense, net

(457

)

—

249

—

(208

)

Income before income tax expense (benefit)

57,254

59,303

(201

)

(52,412

)

63,944

Income tax expense (benefit)

(12,413

)

12,634

—

—

221

Net income

$

69,667

$

46,669

$

(201

)

$

(52,412

)

$

63,723

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

11,436

—

—

11,436

Gain on exchange of debt

8,056

—

—

8,056

Other expense, net

5,168

—

—

5,168

Income before income tax expense (benefit)

22,052

22,017

(19,729

)

24,340

Income tax expense (benefit)

(12,051

)

3,076

—

(8,975

)

Net income

$

34,103

$

18,941

$

(19,729

)

$

33,315

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

22,730

—

—

22,730

Gain on exchange of debt

7,811

—

—

7,811

Other expense, net

5,114

—

—

5,114

Income before income tax expense (benefit)

34,043

44,995

(37,987

)

41,051

Income tax expense (benefit)

(25,090

)

8,527

—

(16,563

)

Net loss

$

59,133

$

36,468

$

(37,987

)

$

57,614

Consolidated

W&T

Parent

Guarantor

Non-Guarantor

Offshore,

Company

Subsidiaries

Adjustments

Eliminations

Inc.

(In thousands)

Operating activities:

Net income

$

69,667

$

46,669

$

(201

)

$

(52,412

)

$

63,723

Adjustments to reconcile net income to net cash

  provided by  operating activities:

Depreciation, depletion, amortization and accretion

39,374

32,557

164

5,743

77,838

Amortization of debt items and other items

1,126

—

—

—

1,126

Share-based compensation

2,434

—

—

—

2,434

Derivative loss

6,219

—

—

—

6,219

Cash receipts on derivative settlements, net

(1,149

)

—

—

—

(1,149

)

Deferred income taxes

221

—

—

—

221

Earnings of affiliates

(46,669

)

—

—

46,669

—

Changes in operating assets and liabilities:

—

Oil and natural gas receivables

(2,444

)

(4,383

)

197

—

(6,630

)

Joint interest receivables

251

—

—

—

251

Income taxes

(12,772

)

12,634

—

—

(138

)

Prepaid expenses and other assets

(37,025

)

(72,465

)

4,445

90,722

(14,323

)

Asset retirement obligation settlements

(7,725

)

(4,399

)

—

—

(12,124

)

Accounts payable, accrued liabilities and other

80,147

8,055

264

(90,722

)

(2,256

)

Net cash provided by operating activities

91,655

18,668

4,869

—

115,192

Investing activities:

Investment in oil and natural gas properties and equipment

(15,638

)

(9,999

)

(6,166

)

—

(31,803

)

Changes in operating assets and liabilities associated with

   investing activities

(21,958

)

(8,669

)

1,297

—

(29,330

)

Acquisition of property interest

(16,617

)

—

—

—

(16,617

)

Net cash used in investing activities

(54,213

)

(18,668

)

(4,869

)

—

(77,750

)

Financing activities:

Payment of interest on 1.5 Lien Term Loan

(4,114

)

—

—

—

(4,114

)

Payment of interest on 2nd Lien PIK Toggle Notes

(2,920

)

—

—

—

(2,920

)

Other

(26

)

—

—

—

(26

)

Net cash used in financing activities

(7,060

)

—

—

—

(7,060

)

Increase in cash and cash equivalents

30,382

—

—

—

30,382

Cash and cash equivalents, beginning of period

99,058

—

—

—

99,058

Cash and cash equivalents, end of period

$

129,440

$

—

$

—

$

—

$

129,440

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

)

—