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W&T Offshore, Inc. (WTI - Snapshot Report) subsequent to raising its 2013 capex plans on Monday has witnessed a northward boost of 4.4% to its shares to close at $18.50 per share on Wednesday.

The company increased its 2013 capital budget to $550 million from the earlier guidance of $450 million. The revised budget includes increased deepwater activity, completion costs on successful exploration wells, additional onshore drilling at Yellow Rose field, as well as additional seismic and leasehold cost.  The revised budget is split 60% for exploration and 40% for development.

Of the $550 million, 65% would be for offshore projects, while 35% for onshore ventures. In the first half of 2013, the company had invested $299.2 million in capital projects. Capital expenditures comprised $109.3 million for exploration activities, $168.1 million for development activities, and $21.8 million for leasehold and other costs.  

W&T Offshore is an independent oil and natural gas producer with offshore operations in the GoM and onshore activities in the Permian Basin of West Texas and in East Texas. The company has grown through acquisitions, exploration and development, and currently holds working interest in approximately 71 offshore fields in federal and state waters (65 producing and six fields capable of producing).  

W&T Offshore currently has under lease over 1.4 million gross acres, including over 710,000 gross acres on the Gulf of Mexico shelf, over 480,000 gross acres in the deepwater and over 220,000 gross acres onshore in Texas. A substantial majority of daily production is derived from wells it operates offshore.

The company currently retains a Zacks Rank #3 (Hold). While we prefer to remain on the sidelines for W&T Offshore, there are other stocks in the sector that appear rewarding. Among these, Abraxas Petroleum Corp. (AXAS - Snapshot Report), Stone Energy Corp. (SGY - Analyst Report) and Matador Resources Company (MTDR - Snapshot Report) are expected to outperform the broader market over the next few months and carry a Zacks Rank #1 (Strong Buy).

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