Quarterly report pursuant to Section 13 or 15(d)

SUBSIDIARY BORROWERS

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SUBSIDIARY BORROWERS
3 Months Ended
Mar. 31, 2023
SUBSIDIARY BORROWERS  
SUBSIDIARY BORROWERS

NOTE 5 — SUBSIDIARY BORROWERS

On May 19, 2021, the Subsidiary Borrowers, entered into the Subsidiary Credit Agreement providing for the Term Loan in an aggregate principal amount equal to $215.0 million. Proceeds of the Term Loan were used by the Subsidiary Borrowers to (i) fund the acquisition of the Mobile Bay Properties and the Midstream Assets from the Company and (ii) pay fees, commissions and expenses in connection with the transactions contemplated by the Subsidiary Credit Agreement and the other related loan documents, including to enter into certain swap and put derivative contracts described in more detail under Note 4 – Derivative Financial Instruments, of this Quarterly Report on Form 10-Q.

The Subsidiary Borrowers are wholly-owned subsidiaries of the Company; however, the assets of the Subsidiary Borrowers are not available to satisfy the debt or contractual obligations of any other entities, including debt securities or other contractual obligations of the Company, and the Subsidiary Borrowers do not bear any liability for the indebtedness or other contractual obligations of any other entities, and vice versa.

During the year ended December 31, 2022, the Subsidiary Borrowers paid cash distributions to W&T of $30.2 million. During the three months ended March 31, 2023, no distributions were paid.

Consolidation and Carrying Amounts

The following table presents the amounts recorded by W&T on the Condensed Consolidated Balance Sheets related to the consolidation of the Subsidiary Borrowers and the subsidiary that owns the equity of the Subsidiary Borrowers (in thousands):

March 31, 2023

December 31, 2022

Assets:

 

  

 

  

Cash and cash equivalents

$

17,958

$

21,764

Receivables:

 

  

 

  

Oil and natural gas sales

 

8,753

 

37,344

Joint interest, net

 

(16,790)

 

(5,760)

Prepaid expenses and other assets

 

745

 

417

Oil and natural gas properties and other, net

 

289,139

 

280,649

Other assets

 

9,755

 

8,473

Liabilities:

 

  

 

  

Accounts payable

9,734

27,387

Undistributed oil and natural gas proceeds

 

2,714

 

7,930

Accrued liabilities

 

14,768

 

45,102

Current portion of long-term debt

30,800

32,119

Long-term debt, net

 

103,402

 

111,188

Asset retirement obligations

 

62,845

 

61,138

Other liabilities

 

30,031

 

47,398

The following table presents the amounts recorded by W&T in the Condensed Consolidated Statement of Operations related to the consolidation of the operations of the Subsidiary Borrowers and the subsidiary that owns the equity of the Subsidiary Borrowers (in thousands):

Three Months Ended March 31,

2023

2022

Total revenues

$

21,123

$

47,515

Total operating expenses

 

20,047

 

14,800

Interest expense, net

 

2,812

 

4,778

Derivative (gain) loss

 

(46,377)

 

96,158