IMPERIAL CAPITAL GLOBAL OPPORTUNITIES CONFERENCE New York – September 20 th , 2012
W&T Offshore, Inc. (NYSE: WTI) Revenues for 2011/1 st half 2012 $971 MM / $451 MM Adj EBITDA for 2011/1 st half 2012 $646 MM / $281 MM Proved Reserves (1) 701.1 Bcfe / 116.9 MMboe Reserves - Oil & Liquids (1) 59% PV-10 of Proved Reserves (1) $3.1 Billion Market Capitalization (2) $1.5 Billion Management Ownership 53.2% Reserves / Production 6.6 years July Average Daily Production 47,118 Barrels of Oil Equivalent 17,387 Barrels of Oil 145.5 MMcf 230,290 Gallons of NGLs (1) Based upon NSAI reserve report at 12/31/11, does not account for ARO costs (2) As of market close on September 17 th 1
Company Operations: Scope And Geographic Coverage Permian Basin • Proved Reserves: 28 MMBoe East Texas • Acreage: ~34,000 Net Acreage: ~143,700 Net • ~4% of Production GOM Deepwater • Proved Reserves: 25 MMBoe • Acreage: ~82,200 Net • ~26% of Production GOM Shelf • Proved Reserves: 64 MMBoe • Acreage: ~431,100 Net • ~70% of Production Offshore acreage numbers do not include Newfield assets subject to PSA and pending closing 2
Why Invest in W&T • Company remains focused on growth at a reasonable price – History of acquiring assets at an attractive valuation – History of taking advantage of previously neglected properties and successfully exploiting acquired assets – Strong liquidity provides capital to pursue acquisition opportunities • Inventory of exploration projects that could provide near-term upside – Plan to drill exploration wells both offshore and onshore in second half of 2012 • High cash flow assets generate significant earnings and cash – Generated Adjusted EBITDA of $281.4 million in first half of 2012 – Gulf Coast oil premium on over 87% of oil volumes • Focused on providing solid shareholder returns – Consistently paying dividends (including special dividends 4 of last 5 years) with a 2011 yield of 3.7% • Proven and experienced management team and staff whose goals and incentives align them with stakeholders – 28+ years of safe operating experience 3
W&T Acquiring Newfield GOM Assets • Acquiring 100% of Newfield’s remaining Gulf of Mexico assets – 78 federal offshore lease blocks, approximately 432,700 gross acres, comprised of 65 deepwater blocks (6 producing), 10 shelf blocks (4 producing), and overriding royalty interests in 3 deepwater blocks (2 producing) • Total undeveloped acreage of ~312,000 gross acres, 91% of which is in the deepwater (65 blocks) – W&T will focus on acquiring seismic data in the various areas to proactively evaluate opportunities in the undeveloped acreage • Average daily production during July of ~8,350 Boepd net – Production has been restored since Hurricane Isaac – Producing deepwater blocks in GB, MC, and VK areas (~75% of current production) • Proved reserves estimated by NSAI are 7.7 MMBoe (71% PDP, 31% liquids) PV-10 (1) of $271.8 million using NYMEX price curves as of 8/15/12 – – Probable reserves are an additional 1.2 MMBoe (1) PV-10 numbers are pre-tax, pre-ARO 4
W&T Offshore Lease Blocks including Newfield Acreage 5
Liquids Rich Reserves Provide Value 2011 Proved Reserves by Category Proved Reserves by Product NGL 15% PDP PUD 46% 35% Oil 44% Gas 41% PNP 19% W&T’s proved liquid reserves 65% of proved reserves are producing are “Crude Oil Rich” as opposed or ready to produce with minimal cost to primarily NGL’s 6
Pricing Premiums Drive Higher Returns Crude Oil Prices – W&T vs. NYMEX vs. Brent Natural Gas Pricing – W&T vs. Henry Hub NYMEX-CUSHING BRENT W&T realized NYMEX Henry Hub W&T realized $125.00 $5.00 $120.00 $4.50 $115.00 $110.00 $4.00 $105.00 $3.50 $100.00 $95.00 $3.00 $90.00 $2.50 $85.00 $80.00 $2.00 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 W&T is receiving premium prices for both it’s oil and gas production In the previous six quarters, our realized pricing consistently beats West Texas Intermediate and Henry Hub prices 7
Drilling Within Cash Flow Historically, we have not borrowed money for drilling Adj. EBITDA CAPEX, Excl. Acquisitions Acquisition CAPEX $700 $600 ($ in millions) $500 $400 $300 $200 $100 $0 2009 2010 2011 2012E* *2012 figure represents capital budget of $425 million, excluding acquisitions and annualized mid-year 2012 Adjusted EBITDA of $281.4 million. 8
Growing Through Multiple Avenues Focusing on all three aspects of our business development – Exploration: Seeking organic growth through exploration activity • Offshore exploration, including deepwater projects • Targets offshore via lease sale and joint interest activity • Low entry cost for Star Prospect & Terry County with upside potential – Asset Development: Continue to exploit and enhance value of existing assets • Multi-well programs, like our current activity at SS 349 “Mahogany”, continue to yield production volumes and potential reserve additions – Acquisitions: Evaluate acquisition opportunities both onshore and offshore • Remain focused on strong full cycle rates of return • Apply our proven criteria (Cash Flow, Financeable, Upside) 9
Remaining CAPEX Focused on Exploration ($ in millions) 2012 CAPEX budget of $425 million, before considering acquisitions More exploration focus in the second half of 2012 $250 Exploration CAPEX more than triples in 2H 2012 $200 $150 Offshore Exploration Onshore Exploration Offshore Development $100 Onshore Development Seismic, Leasehold, and Other $50 $0 1H 2012 2H 2012 10
Offshore Exploration Activity in 2012 MP 163 #1 (WI: 40%) Est. Drill Costs (net) : $3.1 MM Target IP: ~480 Boepd Est. 1 st production: Q2 2013 MP 108 B-1 ST02 (WI: 100%) Est. D&C Costs : $27 MM Target IP: ~1,200 Boepd Est. 1 st production: Q1 2013 WC 73 #2 (WI: 30%) Est. Drill Costs (net) : $5.2 MM Target IP: ~800 Boepd Est. 1 st production: Q2 2013 MC 698 #1 “Big Bend” (WI: 20%) Operator: Noble Energy Est. Drill Cost (net): $13.3 MM Exploratory Joint Venture Spud Date: mid October 2012 11
Gulf of Mexico Activity 2012 • Gulf of Mexico remains a focus for us – Majority source of our cash flow – High rate of return projects with rapid payback • We are positioned well in the Gulf of Mexico – Fourth largest producer on the Gulf of Mexico shelf – Substantial acreage of ~513,000 net acres (excludes Newfield acquisition acreage) – Preferred buyer of properties & Majors will want to keep shedding assets • 2012 Activity Update – Completed and brought online 2 shelf development wells YTD in 2012 • SS 349 A-13 and A-5 ST (both at “Mahogany”, 100% WI) – One deepwater development well ( MC 243 A-4 ST “Matterhorn”, 100% WI) • Significant Exploration Activity in 2H 2012 12
Offshore Development Drilling in 2012 SS 349 A-5 ST WI: 100% Status: Producing MC 243 A-4 ST D&C : $12.3 MM WI: 100% IP Rate: 960 Boepd D&C : $28.3 MM SS 349 A-13 IP Rate: 3,187 Boepd WI: 100% Status: Producing SS 349 A-9 ST D&C : $27.6 MM WI: 100% IP Rate: 1,657 Boepd Status: drilling Est. D&C : $29.8 MM Target IP: 1,980 Boepd SS 349 A-14 WI: 100% Spud date: late Q4 2012 Target IP: 2,100 Boepd in 2Q 2013 13
Ship Shoal 349 - Mahogany Field (WI:100%) Ship Shoal 349 production has grown 300% over the last nine months SS 349 "Mahogany" Average Monthly Production 4500 A-13 4000 A-1 ST4 3500 Upcoming Activity 3000 BOEPD at Mahogany 2500 A-11 • A-9 ST, drilling, target 2000 IP: ~1,980 BOEPD 1500 • A-2 ST (work over), Q4 1000 2012, target IP: 375 500 BOEPD 0 • A-14, should spud in Q4 Jan-10 Mar-10 May-10 Jul-10 Sep-10 Nov-10 Jan-11 Mar-11 May-11 Jul-11 Sep-11 Nov-11 Jan-12 Mar-12 May-12 Jul-12 2012, target IP: ~2,100 BOEPD in Q2 of 2013 14
Mississippi Canyon 243 - Matterhorn (WI: 100%) Matterhorn production has nearly doubled over the past 12 months MC 243 "Matterhorn" Production Profile 7000 A-4 ST 6000 A-7 5000 A-7 recomplete 4000 BOEPD • Online July 2011 3000 • IP rate ~1,210 Boepd 2000 1000 A-4 ST 0 • Online July 2012 5/7/2010 7/7/2010 9/7/2010 11/7/2010 1/7/2011 3/7/2011 5/7/2011 7/7/2011 9/7/2011 11/7/2011 1/7/2012 3/7/2012 5/7/2012 7/7/2012 • IP rate ~3,100 Boepd Matterhorn platform was offline for much of April 2011 for equipment repair 15
New Leases Equal New Opportunities MP 127 recently awarded W&T was high bidder* on 11 of 13 blocks in the recent GOM lease sale: SS 360 SS 368 MP 89 MP 93 MP 106 MP 127 MP 285 MP 286 CH 28 W&T Operated Property CH 29 CH 39 OBO Property *BOEM still evaluating high “High Bid” Leases bids per the OCS Sale process 16
Onshore Activity in 2012 Terry County (Exploration & Delineation) Star Project (Exploration & Delineation) Yellow Rose ( Exploration & Development ) 17
Permian Basin Geology Multiple operators are targeting these zones with horizontal activity • Our focus in the West Texas Permian Basin is the Wolfberry • Vertical wells in the Permian can produce from over 4,000’ of net pay zones • Numerous operators have already begun to show success with horizontal drilling in the area targeting the Wolfcamp • W&T’s first horizontal in the Permian was drilled in the Upper Wolfcamp within our Yellow Rose acreage, and we are currently preparing to spud our second horizontal well. 18
Recommend
More recommend
