Tracy W. Krohn, chief executive of W&T Offshore Inc., Houston, (NYSE:WTI) sees opportunity in the current global cash-flow crisis.
“Our strong balance sheet, which includes $685 million in cash on Sept. 30, and our $500-million undrawn revolver, positions us to take advantage of the unique opportunities that are being created by the recent credit crisis,” Krohn says.
Pritchard Capital Partners LLC senior analyst Steve Berman says W&T’s position is “stellar, though the impact of hurricanes Gustav and Ike seem to be deeper, and longer lasting than originally thought.”
W&T reports net income for the third quarter of $78.2 million, or $1.03 per diluted share, on revenues of $289.8 million, compared with net income for the same quarter in 2007 of $36.3 million, or $0.48 per diluted share, on revenues of $255.2 million. Net income increased principally due to a higher realized price of $14.57 per thousand cubic feet equivalent, a 65% increase over the $8.83 in 2007.
“The third quarter certainly had its share of challenges including two hurricanes in the Gulf of Mexico,” Krohn says. “Although we did have some damage from the storms, we are working hard to restore production.”
Current production is 8,800 barrels ofoil plus 106 million cubic feet of gas, or 159 million cubic feet equivalent, per day or about 52% of production prior to the storms. Total production for 2008 is expected to be between 94.6- and 97.2 billion cubic feet equivalent, down from the earlier forecast of 115- to 125 billion equivalent.
“The majority of our production is ready to come back online and we are waiting for downstream third-party pipeline and processing facilities to complete their repairs,” Krohn says. The company has had three successful out of five exploration wells and one-for-one in development wells for an overall success rate of about 80% so far this year.—JAS
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