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W&T (WTI) Up 5.7% Since Last Earnings Report: Can It Continue?
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A month has gone by since the last earnings report for W&T Offshore (WTI - Free Report) . Shares have added about 5.7% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is W&T due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
W&T Offshore Q4 Earnings Lag Estimates, Revenues Fall Y/Y
W&T Offshore, Inc. 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.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates.
The consensus estimate has shifted -25% due to these changes.
VGM Scores
Currently, W&T has a poor Growth Score of F, however its Momentum Score is doing a bit better with a D. However, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of this revision indicates a downward shift. It's no surprise W&T has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.
Performance of an Industry Player
W&T is part of the Zacks Oil and Gas - Exploration and Production - United States industry. Over the past month, Matador Resources (MTDR - Free Report) , a stock from the same industry, has gained 7.7%. The company reported its results for the quarter ended December 2023 more than a month ago.
Matador reported revenues of $836.13 million in the last reported quarter, representing a year-over-year change of +18.2%. EPS of $1.99 for the same period compares with $2.08 a year ago.
Matador is expected to post earnings of $1.39 per share for the current quarter, representing a year-over-year change of -7.3%. Over the last 30 days, the Zacks Consensus Estimate has changed -5.4%.
Matador has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of B.
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W&T (WTI) Up 5.7% Since Last Earnings Report: Can It Continue?
A month has gone by since the last earnings report for W&T Offshore (WTI - Free Report) . Shares have added about 5.7% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is W&T due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
W&T Offshore Q4 Earnings Lag Estimates, Revenues Fall Y/Y
W&T Offshore, Inc. 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.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates.
The consensus estimate has shifted -25% due to these changes.
VGM Scores
Currently, W&T has a poor Growth Score of F, however its Momentum Score is doing a bit better with a D. However, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of this revision indicates a downward shift. It's no surprise W&T has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.
Performance of an Industry Player
W&T is part of the Zacks Oil and Gas - Exploration and Production - United States industry. Over the past month, Matador Resources (MTDR - Free Report) , a stock from the same industry, has gained 7.7%. The company reported its results for the quarter ended December 2023 more than a month ago.
Matador reported revenues of $836.13 million in the last reported quarter, representing a year-over-year change of +18.2%. EPS of $1.99 for the same period compares with $2.08 a year ago.
Matador is expected to post earnings of $1.39 per share for the current quarter, representing a year-over-year change of -7.3%. Over the last 30 days, the Zacks Consensus Estimate has changed -5.4%.
Matador has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of B.