W&t Offshore, Inc. · NYSE:WTI
W&t Offshore — Raymond James Institutional Investors Conference 2010
27 slides from W&t Offshore's conference presentation, Mar 9, 2010
Slide 1: Raymond James Institutional Investors Conference
Exhibit 99.1 Raymond James Institutional Investors Conference March 10, 2010
Slide 2: Company Highlights
Company Highlights Highlights Reserve Data 2009 2008 Ticker WTI (NYSE) Proved Reserves (Bcfe) 371 491 Initial Public Offering January 2005 Proved Developed Reserves (Bcfe) 284 334 Employees 286 Proved Developed % 76 % 68 % (1) Market Capitalization ($ in MMs) $693 Oil and Liquids % 55 % 54 % Insider
Slide 3: Key Investment Considerations
Key Investment Considerations • Large acreage position in the Gulf of Mexico • Operating in the Gulf of Mexico for 26 years • Experienced staff • Strong cash flow & good liquidity • Balanced oil and gas reserve mix • Focused on growth opportunities at reasonable cost – Improving environment for acqu
Slide 4: Proved Reserve Geographic Diversification
Proved Reserve Geographic Diversification Our geographic diversity provides additional protection during a hurricane 3
Slide 5: What is great about the Gulf of Mexico
What is great about the Gulf of Mexico • Great history of production and reserves – Reserves at deeper but virtually untapped zones, significant upside potential (i.e. Davy Jones, Jack, etc.) – Highly prolific with multiple pay zones – Reserve to production profile is consistent – Established infras
Slide 6: Our Historical Gulf of Mexico Focus
Our Historical Gulf of Mexico Focus • Operating successfully in the Gulf of Mexico for 26 years – 10 year exploration drilling success rate of 78% – 10 year development drilling success rate of 90% – Established infrastructure allows for accelerated cash flow • Inventory of 160 drilling prospects –
Slide 7: Accomplishments in 2009
Accomplishments in 2009 • 77% success in 2009 exploration and development drilling program, including successfully drilling eight of ten exploration wells and two of three development wells • Asset retirement obligations decreased $199.1 million via dispositions and cost revisions • LOE decreased $2
Slide 8: 2010 Goals & Objectives: Focusing on Growth and Profitability
2010 Goals & Objectives: Focusing on Growth and Profitability • Grow reserves – Initial drilling program of 10 wells – 187 Bcfe net unrisked most likely reserves – Pursue acquisitions with proved reserves and exploitation opportunities – Drill high impact wells – 63% increase in cap-ex program • Inc
Slide 9: 2010 Goals & Objectives: Focusing on Growth and Profitability – Cont’d
2010 Goals & Objectives: Focusing on Growth and Profitability – Cont’d • Cost management – LOE controls – Possible divestiture on non-core properties – Committed to competitive F&D metrics • Improve EBITDA margins closer to historic levels – Reducing costs of goods & services in line with commodity
Slide 10: Reserve Growth Opportunities
Reserve Growth Opportunities • Acquisitions – Prices have declined substantially since 2008 – Deal flow is accelerating – Experienced A&D team – Evaluating onshore (long life reserves) and offshore (deepwater) – Aggressively pursue acquisitions in the current environment • Drilling Projects – Large
Slide 11: 2010 Capital Expenditures Budget
2010 Capital Expenditures Budget • $450 million budget is 63% higher than in 2009 • $153 million is allocated to: – Ten wells, including nine exploration and one development – Well recompletions, facilities capital, seismic and leasehold • Remainder of budget has been allocated to: – Acquisitions –
Slide 12: Proposed 2010 Drilling Program
Proposed 2010 Drilling Program Development MP 108 – E3 WI: 67% Exploration Shelf MP 98 - #1 Non-commercial WI: 100% Shelf VioscaKnoll Bay Marchand#2 Main W. WI: 30% Main Pass Cameron S. and E. Shelf Pass S. Pass West E. Add Grand Delta E. Ship Isle High Cameron Eugene Shoal Island Island South Galve
Slide 13: Strategic Budgeting with a Long-Term Focus
Strategic Budgeting with a Long-Term Focus Capital Expenditures • We drill within cash flow ($ in millions) $1,800 • Focus on maintaining $1,600 liquidity $1,400 • Reduce capital budget when $1,200 service costs are high and $1,062 commodity prices are low $1,000 • Maintain a disciplined $800 $117 i
Slide 14: Proved Reserves by Year
Proved Reserves by Year Oil & NGLs (Bcfe) Natural Gas (Bcf) 800.0 Total CapEx $1,800 735.2 • Reserves & production $1,650.8 $1,600 growth typically track capital 638.8 spending levels $1,400 600.0 334.0 • Negative pricing & adverse 491.5 491.1* $1,200 economic conditions offset 306.0 drilling succes
Slide 15: Production Profile
Production Profile Oil & NGLs (Bcfe) Natural Gas (Bcf) • 2010 production guidance of 126.5 60 to 80 BCFE is based on the initial 7 well budget and 99.2 97.9 $150 million cap-ex program 94.8 – not full $450 million budget 71.1 • Second half of 2008 and 2009 was focused on preserving capital and lower
Slide 16: Proved & 3P Reserves Mix
Proved & 3P Reserves Mix 2009 – Proved Reserves 2009 - 3P Reserves Proved PDP 40% 43% PUD Possible Probable 24% 44% PDNP 16% 33% Oil Gas Total Oil Gas Total Mbo MMcf MMcfe Mbo MMcf MMcfe PDP 12,667 86,561 162,564 43% Proved 34,203 165,757 370,972 40% PDNP 11,041 54,714 120,963 33% Probable 13,043 62
Slide 17: Strategic Acquisition Criteria Opportunistic Approach
Strategic Acquisition Criteria Opportunistic Approach • Properties generating cash flow – Strong current production rates • Financeable – Large portion of reserve base is proved developed and can be financed • Identified upside – Properties have undrilled prospects – Contiguous acreage to existing h
Slide 18: Prudent Investment Strategy
Prudent Investment Strategy • Proven, experienced and expanding A&D team • Improving transaction market (1) – Domestic E&P transactions of $5.8 billion in 2009 compared to $26.6 billion in 2008 – Deals of $7.8 billion done thus far in 2010 – Transaction prices have fallen from $22.92/Boe in the thir
Slide 19: Adjusted EBITDA Margins Improving
Adjusted EBITDA Margins Improving • Cost of goods & services have historically tracked with commodity prices in the GOM • From 2000 thru 2007, Adj. EBITDA margins averaged 79% despite variable commodity prices • In 2009, margins were squeezed by high service costs and low commodity prices • Hurrican
Slide 20: W&T Liquidity - Opportunities
W&T Liquidity - Opportunities • Reduced debt by $200 million and ARO by $200 million • Cash balance at February 25, 2010 ~ $250 million • Revolver availability at February 25, 2010 = $262 million with $405 million borrowing base – We redrew the revolver to generate interest income that helps offset
Slide 21: Key Drivers
Key Drivers • Large acreage position • Operating in the Gulf of Mexico for 26 years • Strong cash flow & liquidity • Focus on achieving sustainable production and reserve growth • Improving operating metrics and margins • Growing staff to increase investment opportunities • Strong insider ownership
Slide 22: Reconciliation of Net Income to EBITDA
Reconciliation of Net Income to EBITDA The following table presents a reconciliation of our consolidated net income to consolidated EBITDA to Adjusted EBITDA: Year Ended December 31, 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 ($ in thousands) Net income $ 48,204 $ 63,569 $ 2,049 $ 116,582 $ 1
Slide 23: Forward-Looking Statement Disclosure
Forward-Looking Statement Disclosure This presentation, contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act and Section 21E of the Exchange Act. Forward-looking statements give our current expectations or
Slide 24: W&T Offshore, Inc. (NYSE: WTI)
W&T Offshore, Inc. (NYSE: WTI) Nine Greenway Plaza Suite 300 Houston, TX 77046 Main line - 713-626-8525 Fax - 713-626-8527 Investor Relations - 713-297-8024 www.wtoffshore.com www.investorrelations@wtoffshore.com
Slide 25: Appendix
W&T OFFSHORE Appendix
Slide 26: 2010 Guidance and Capital Budget
2010 Guidance and Capital Budget Estimated Production (1) Full-Year 2010 Crude oil (MMBbls) 4.6 – 6.2 Natural gas (Bcf) 32.4 – 42.8 Total (Bcfe) 60.0 – 80.0 Operating Expenses ($ in millions) Full-Year 2010 Lease operating expenses $168 – $206 Gathering, transportation & production taxes $14 – $18 G
Slide 27: Hedging Strategy & Schedule
Hedging Strategy & Schedule • The Company has hedged 11.9 Bcf of its 2010 natural gas production and 1.27 MMBbls of its 2010 oil production – Hedges were put in place to augment the borrowing base and the 2010 drilling budget – Natural gas production is hedged with floors as low as $5.00 and ceiling
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