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W&T Offshore (WTI) Q4 Earnings Lag Estimates on Lower Prices
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W&T Offshore, Inc. (WTI - Free Report) reported a fourth-quarter 2023 loss of 6 cents per share (excluding one item), which lagged the Zacks Consensus Estimate of earnings of 2 cents per share. The bottom line also deteriorated from the year-ago quarter’s reported profit of 10 cents.
Total quarterly revenues of $132.3 million missed the Zacks Consensus Estimate of $142 million. The top line also declined from $189.7 million reported in the prior-year quarter.
Weak quarterly results were due to significantly reduced realized prices and lower production volumes.
Production Statistics
Total production for the quarter averaged 34.1 thousand barrels of oil equivalent per day (MBoe/d), down from 38.6 MBoe/d in the corresponding period of 2022. Our estimate for the same was pinned at 37.5 MBoe/d.
Oil production totaled 1,219 thousand barrels (MBbls), down from 1,375 MBbls in the year-ago quarter. The figure missed our estimate of 1,308 MBbls.
Natural gas liquids output totaled 329 MBbls, lower than 371 MBbls a year ago. The figure also missed our estimate of 363 MBbls.
Natural gas production of 9,533 million cubic feet (MMcf) was lower than 10,843 MMcf recorded in the prior-year quarter. The figure also missed our estimate of 10,688 MMcf.
Realized Commodity Prices
The average realized price for oil in the fourth quarter was $77.17 per barrel, lower than the year-ago level of $81.27. Our estimate for the same was pegged at $82.40.
The average realized price of NGL declined to $20.82 per barrel from $25.70 in the fourth quarter of 2022. Our estimate for the same was pinned at $24.33 per barrel.
The average realized price of natural gas in the December quarter was $3.08 per thousand cubic feet, down from $6.12 in the corresponding period of 2022. The average realized price for oil-equivalent output decreased to $41.55 per barrel from $52.82.
Operating Expenses
Lease operating expenses increased to $20.61 per Boe in the fourth quarter from $19.42 in the year-ago period. The reported figure came in higher than our estimate of $18.52 per Boe. Also, general and administrative expenses declined to $5.82 per Boe in the fourth quarter from $6.18 a year ago. The figure came in lower than our estimate of $5.95.
Cash Flow
Net cash from operations in the fourth quarter totaled $35.7 million, up from $12.7 million recorded in the year-ago quarter.
Free cash flow in the reported quarter declined to $15.8 million from approximately $25 million in the year-earlier quarter.
Capital Spending & Balance Sheet
For the reported quarter, W&T Offshore spent $10.3 million on oil and gas resources and equipment.
As of Dec 31, 2023, the company’s cash and cash equivalents were $173 million. Its net long-term debt amounted to $361.2 million. The current portion of the long-term debt is $29.4 million.
Guidance
W&T Offshore completed the acquisition of six new fields in the U.S. Gulf of Mexico in the first quarter of 2024. In light of its recent acquisitions and the current acquisition opportunities in the Gulf of Mexico, the company has decided to defer the drilling of the Holy Grail well to 2025. For the first quarter of 2024, W&T Offshore expects production to be in the range of 2,952-3,298 Mboe. For full-year 2024, its production is anticipated in the band of 12,417-14,592 Mboe. Capital expenditure is expected to be in the range of $35-$45 million for 2024.
Zacks Rank and Key Picks
Currently, WTI carries a Zacks Rank #5 (Strong Sell).
Investors might want to look at some better-ranked stocks in the energy sector, such as Energy Transfer LP (ET - Free Report) , Archrock, Inc. (AROC - Free Report) and Harbour Energy (HBRIY - Free Report) . Both Energy Transfer and Archrock presently sport a Zacks Rank #1 (Strong Buy), while Harbour Energy carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Energy Transfer is a midstream player that owns and operates one of the most diversified portfolios of energy assets in the United States. With a pipeline network extending more than 125,000 miles, its network spans over 44 states. With a presence in all the major U.S. production basins, the company’s outlook seems positive.
Archrock is an energy infrastructure company based in the United States, with a focus on midstream natural gas compression. It provides natural gas contract compression services and generates stable fee-based revenues.
Harbour Energy is a leading independent oil and gas company, primarily involved in upstream operations. The recently announced acquisition of Wintershall Dea asset portfolio is expected to increase HBRIY's estimated production. The company has also done well in reducing its debt in the past year.
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W&T Offshore (WTI) Q4 Earnings Lag Estimates on Lower Prices
W&T Offshore, Inc. (WTI - Free Report) reported a fourth-quarter 2023 loss of 6 cents per share (excluding one item), which lagged the Zacks Consensus Estimate of earnings of 2 cents per share. The bottom line also deteriorated from the year-ago quarter’s reported profit of 10 cents.
Total quarterly revenues of $132.3 million missed the Zacks Consensus Estimate of $142 million. The top line also declined from $189.7 million reported in the prior-year quarter.
Weak quarterly results were due to significantly reduced realized prices and lower production volumes.
Production Statistics
Total production for the quarter averaged 34.1 thousand barrels of oil equivalent per day (MBoe/d), down from 38.6 MBoe/d in the corresponding period of 2022. Our estimate for the same was pinned at 37.5 MBoe/d.
Oil production totaled 1,219 thousand barrels (MBbls), down from 1,375 MBbls in the year-ago quarter. The figure missed our estimate of 1,308 MBbls.
Natural gas liquids output totaled 329 MBbls, lower than 371 MBbls a year ago. The figure also missed our estimate of 363 MBbls.
Natural gas production of 9,533 million cubic feet (MMcf) was lower than 10,843 MMcf recorded in the prior-year quarter. The figure also missed our estimate of 10,688 MMcf.
Realized Commodity Prices
The average realized price for oil in the fourth quarter was $77.17 per barrel, lower than the year-ago level of $81.27. Our estimate for the same was pegged at $82.40.
The average realized price of NGL declined to $20.82 per barrel from $25.70 in the fourth quarter of 2022. Our estimate for the same was pinned at $24.33 per barrel.
The average realized price of natural gas in the December quarter was $3.08 per thousand cubic feet, down from $6.12 in the corresponding period of 2022. The average realized price for oil-equivalent output decreased to $41.55 per barrel from $52.82.
Operating Expenses
Lease operating expenses increased to $20.61 per Boe in the fourth quarter from $19.42 in the year-ago period. The reported figure came in higher than our estimate of $18.52 per Boe. Also, general and administrative expenses declined to $5.82 per Boe in the fourth quarter from $6.18 a year ago. The figure came in lower than our estimate of $5.95.
Cash Flow
Net cash from operations in the fourth quarter totaled $35.7 million, up from $12.7 million recorded in the year-ago quarter.
Free cash flow in the reported quarter declined to $15.8 million from approximately $25 million in the year-earlier quarter.
Capital Spending & Balance Sheet
For the reported quarter, W&T Offshore spent $10.3 million on oil and gas resources and equipment.
As of Dec 31, 2023, the company’s cash and cash equivalents were $173 million. Its net long-term debt amounted to $361.2 million. The current portion of the long-term debt is $29.4 million.
Guidance
W&T Offshore completed the acquisition of six new fields in the U.S. Gulf of Mexico in the first quarter of 2024. In light of its recent acquisitions and the current acquisition opportunities in the Gulf of Mexico, the company has decided to defer the drilling of the Holy Grail well to 2025. For the first quarter of 2024, W&T Offshore expects production to be in the range of 2,952-3,298 Mboe. For full-year 2024, its production is anticipated in the band of 12,417-14,592 Mboe. Capital expenditure is expected to be in the range of $35-$45 million for 2024.
Zacks Rank and Key Picks
Currently, WTI carries a Zacks Rank #5 (Strong Sell).
Investors might want to look at some better-ranked stocks in the energy sector, such as Energy Transfer LP (ET - Free Report) , Archrock, Inc. (AROC - Free Report) and Harbour Energy (HBRIY - Free Report) . Both Energy Transfer and Archrock presently sport a Zacks Rank #1 (Strong Buy), while Harbour Energy carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Energy Transfer is a midstream player that owns and operates one of the most diversified portfolios of energy assets in the United States. With a pipeline network extending more than 125,000 miles, its network spans over 44 states. With a presence in all the major U.S. production basins, the company’s outlook seems positive.
Archrock is an energy infrastructure company based in the United States, with a focus on midstream natural gas compression. It provides natural gas contract compression services and generates stable fee-based revenues.
Harbour Energy is a leading independent oil and gas company, primarily involved in upstream operations. The recently announced acquisition of Wintershall Dea asset portfolio is expected to increase HBRIY's estimated production. The company has also done well in reducing its debt in the past year.