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W&T Offshore, Inc. (WTI - Free Report) has sold all of its working interest in West Delta 29 block (OCS 00385) located on the shelf of the Gulf of Mexico (GoM) to EPL Oil & Gas Inc. , for $21.8 million with an effective date of Jan 1, 2013.

W&T Offshore’s sale of this non-core, non-operated asset  raised funds for developing its core assets.  This is in-line with the company’s strategy of focusing on projects which have the greatest potential to create shareholder value. In the first half of 2013, the company 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.  Offshore activities accounted for 64% of the capital expenditures with 36% allocated to onshore activities.

W&T Offshore is an independent oil and natural gas producer with offshore operations offshore 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 holds a Zacks Rank #3, which is equivalent to a short-term Hold rating. While we prefer to remain on the sidelines for W&T Offshore, there are other stocks in the sector that appear rewarding. Among these, Stone Energy Corp. (SGY - Free Report) and Matador Resources Company (MTDR - Free Report) are expected to outperform the broader market over the next few months. Both these stocks carry a Zacks Rank #1 (Strong Buy).

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