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W&T Offshore's (WTI) Q3 Production Hurt by Hurricane Season

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W&T Offshore, Inc. (WTI - Free Report) recently provided third-quarter operational update. It is scheduled to report quarterly results on Nov 4, after the closing bell. Let’s see how the company fared in the third quarter and which way estimates are headed.

Operational Update

Its production for the third quarter was significantly affected by several storms in the Gulf of Mexico. While tropical storm Cristobal affected second-quarter output, hurricanes Beta, Hanna, Laura, Marco and Sally caused production shut-ins in the third quarter. Moreover, planned downtime at the Magnolia field and unplanned downtime at Mobile Bay are expected to have affected volumes. The adverse effect of the downtimes is estimated at 9,000 barrels of oil equivalent per day (Boe/d) for the third quarter.

The company’s third-quarter production volumes, affected by the five hurricanes, are expected in the range of 32,500-33,900 Boe/d. Of the total volumes, 35% is expected to be oil, while 12% and 53% are likely to be natural gas liquids and natural gas, respectively. The year-ago production was recorded at 41,149 Boe/d.

Decreased production and lower commodity prices amid the ongoing market volatility are expected to have affected W&T Offshore’s third-quarter profit levels. Moreover, lower production volumes will likely result in higher per-unit costs and expenses. Given the fact that the hurricane season is not over yet, fourth-quarter volumes might get further affected. However, it has restored production in several GoM fields. Fourth-quarter production is expected within 31,500-35,000 Boe/d.

Estimates

The Zacks Consensus Estimate for third-quarter earnings is pegged at a loss of 18 cents per share, indicating a 238.5% year-over-year decline. It has witnessed one downward estimate but no upward movement in the past 60 days. Revenues for the third quarter are estimated at $81.1 million, signaling a 38.7% decrease from the year-ago period.

Despite an adverse operating environment, the company manages to keep investors happy with positive adjusted EBITDA. In fact, it delivered positive earnings surprises in all the last four quarters, with an average surprise of 731%. Moreover, the company decreased spending in early-2020 to ensure free cash flow generation. Notably, its shares have risen 2.2% in the past six months.

W&T Offshore, Inc. Price and EPS Surprise

WT Offshore, Inc. Price and EPS Surprise

WT Offshore, Inc. price-eps-surprise | WT Offshore, Inc. Quote

Zacks Rank & Other Key Picks

Currently, W&T Offshore sports a Zacks Rank #1 (Strong Buy). Other top-ranked players in the energy space include Equinor ASA (EQNR - Free Report) , Apache Corporation (APA - Free Report) and Matador Resources Company (MTDR - Free Report) . While Equinor has a Zacks Rank #1, Apache and Matador Resources hold a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Equinor’s bottom line for 2021 is expected to skyrocket 118.2% year over year.

Apache’s bottom line for 2021 is expected to surge 84.3% year over year.

Matador Resources’ sales for 2021 are expected to rise 12.2% year over year.

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