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W&T Offshore (WTI) Stock Declines 2.4% on Q1 Earnings Miss

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W&T Offshore, Inc. (WTI - Free Report) declined 2.4% since it reported weak first-quarter results on May 9. The underperformance was owing to lower oil equivalent production and prices.

WTI reported a first-quarter 2023 adjusted loss (excluding one-time items) of 2 cents per share, missing the Zacks Consensus Estimate of earnings of 16 cents. The bottom line deteriorated from the year-ago quarter’s earnings of 21 cents per share.

Total quarterly revenues of $132 million missed the Zacks Consensus Estimate of $151 million. The top line also decreased from $191 million in the prior-year quarter.

Production Statistics

The total production averaged 32.5 thousand barrels of oil equivalent per day (MBoe/d), down from the year-ago quarter’s 37.8 MBoe/d.

Oil production was 1,350 thousand barrels (MBbls), up from the year-ago level of 1,304 MBbls. Natural gas liquids’ output totaled 294 MBbls, lower than 349 MBbls a year ago. Natural gas production of 7,677 million cubic feet (MMcf) in the reported quarter was lower than 10,471 MMcf in the year-earlier period.

Realized Commodity Prices

The average realized price for oil in the first quarter was $71.85 a barrel, lower than the year-ago level of $94.10. The average realized price of NGL declined to $26.51 from $39.60 per barrel in the prior year. The average realized price of natural gas in the March quarter was $3.23 per thousand cubic feet, down from $4.91 in the last year’s comparable period. The average realized price for oil-equivalent output decreased to $44.32 per barrel from $55.29.

Operating Expenses

Lease operating expenses rose to $22.29 per Boe in the first quarter from $12.78 a year ago. Also, general and administrative expenses increased to $6.81 per Boe from $4.05.

Cash Flow

Net cash from operations in the first quarter was $23.4 million, which declined from $27.5 million in the year-ago period.

Free cash flow in the reported quarter decreased to $12.4 million from $46.9 million in the year-ago quarter.

Capital Spending & Balance Sheet

W&T Offshore spent $7.4 million in capital through the March quarter on oil and gas resources and equipment.

As of Mar 31, 2023, the company’s cash and cash equivalents were $177.4 million. Its net long-term debt in the quarter was $372.5 million. The current portion of the long-term debt is $30.8 million.

Guidance

For the second quarter of this year, W&T Offshore projects production in the band of 3,177 to 3,557 MBoe. For 2023, WTI expects production of 13,510 to 14,955 MBoe.

Zacks Rank & Stocks to Consider

Currently, W&T Offshore carries a Zacks Rank #4 (Sell). Better-ranked players in the energy space include Murphy USA Inc. (MUSA - Free Report) , Sunoco LP (SUN - Free Report) and Cactus, Inc. (WHD - Free Report) . While Murphy USA carries a Zacks Rank #2 (Buy), Sunoco and Cactus sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Murphy USA is a leading retailer of gasoline. MUSA has more than 1,700 stores and has witnessed upward earnings estimate revisions for 2023 earnings in the past seven days.

Sunoco, a distributor of motor fuel to approximately 10,000 convenience stores, has a stable business model. For this year, SUN has witnessed upward earnings estimate revisions in the past seven days.

Cactus has been aiding its clients in fast-tracking their well drilling and completion activities. The company has also been enabling lower operator emissions per barrel of production. Thus, there has been a significantly lower carbon intensity per well.


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