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W&T Offshore Q1 Earnings Miss on Lower Commodity Price Realizations
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Key Takeaways
WTI posted break-even Q1 EPS vs 2 cents estimate; revenues hit $150M, up 16% y/y and above consensus.
WTI averaged 36.2 MBoe/d; LOE per Boe fell 22% to $20.29 as cost-saving measures materialized.
WTI took a $24.5M derivative loss but generated $21M free cash flow; quarter-end cash balance totaled $130.9M.
W&T Offshore, Inc. (WTI - Free Report) posted break-even first-quarter 2026 earnings per share, compared with the Zacks Consensus Estimate of 2 cents. Revenues of $150.0 million beat the consensus mark of $137.0 million by 9.5% and increased 15.5% year over year.
Operationally, the offshore producer turned in average sales volumes of 36.2 MBoe/d (53% liquids), keeping output near the top end of guidance despite adverse weather. The quarter also featured sharply lower lease operating expenses per barrel, helping support a meaningful step-up in profitability measures such as Adjusted EBITDA.
W&T Offshore, Inc. Price, Consensus and EPS Surprise
Before realized derivative settlements, the average realized sales price was $45.08 per Boe. Oil realized $69.52 per barrel, natural gas realized $5.41 per Mcf and NGLs realized $16.26 per barrel, with the combined oil-equivalent price down 3% from the year-ago quarter’s $46.50 per Boe.
W&T Offshore Shows Solid Liquids-Weighted Output
Production growth remained a key operational theme. The company said first-quarter output increased 19% from the year-ago period, supported by contributions from prior acquisitions and continued execution across its Gulf of America asset base.
Total oil and natural gas sales volumes were 3,259 thousand barrels of oil equivalent (Mboe), including 1,296 thousand barrels (MBbls) of oil, 425 MBbls of NGLs and 9,223 million cubic feet per day (MMcf) of natural gas. This is comparable with the prior year sales figure of 2,744 Mboe, which includes 1,230 MBbls, 200 MBbls of NGLs and 7,884 MMcf of natural gas. The production mix leaned toward liquids, with oil representing 40% of volumes and NGLs 13%, while natural gas contributed the remaining 47%.
WTI Lowers LOE as Cost Initiatives Take Hold
Expense control stood out as a counterweight to a choppy operating environment offshore. Lease operating expenses (LOE) were $66.1 million, below the midpoint of guidance and 7% lower than the prior-year quarter despite higher production.
On a per-unit basis, LOE fell 22% to $20.29 per Boe from $25.88 a year ago. Management attributed the improvement to lower base LOE spend, cost-saving measures that began to materialize during the quarter and favorable commodity price-driven input costs.
W&T Offshore Sees Derivatives Weigh on Results
While operating trends improved, derivatives created a meaningful drag on reported profitability. W&T recorded a net derivative loss of $24.5 million, including $21.8 million of unrealized losses tied to changes in the fair value of open contracts and $2.7 million of realized losses.
As a result, the company reported a net loss of $22.5 million, compared with a net loss of $30.6 million in the year-ago quarter.
WTI Generates Free Cash Flow, Holds Liquidity
Cash generation strengthened alongside the operational and cost progress. W&T delivered free cash flow of $21.0 million, a sharp improvement from the negative free cash flow of $11.2 million in the prior quarter. The improvement reflects higher adjusted earnings power and lower capital spending in the period.
Liquidity remained solid at quarter's end. As of March 31, 2026, the company had cash, cash equivalents and restricted cash of of $130.9 million and net debt of $220.3 million. W&T also maintained its shareholder return framework, declaring a second-quarter 2026 dividend of $0.01 per share payable May 28, 2026, to shareholders of record on May 21.
WTI’s 2026 Outlook
Looking ahead, management signaled a temporary volume dip for the second quarter tied to a planned third-party Mobile Bay processing facility turnaround. The company expects the event to pressure NGL volumes while boosting natural gas volumes, with normal operations anticipated to resume by early to mid-May.
For the second quarter of 2026, W&T guided to total oil-equivalent production of 2,983-3,319 MBoe, while full-year 2026 production is expected in the 12,227-13,560 MBoe range. The company expects second-quarter lease operating expenses of $72.6-$80.6 million and reaffirmed its full-year capital expenditures outlook of $19.5-$24.5 million, excluding potential acquisitions.
Equinor ASA is one of the leading integrated energy companies globally and a major supplier of natural gas in Europe. The recent conflict between the United States and Iran has resulted in a spike in gas prices and disrupted LNG supply, following damage to critical infrastructure in Qatar, tightening global LNG supply. This is expected to boost demand for Eqinor’s gas exports to Europe, positioning the company to benefit from heightened prices. The company’s expansion in the renewable energy space positions it for long-term growth as more countries transition toward cleaner energy solutions to meet their climate goals.
Galp Energia is a Portuguese energy company engaged in exploration and production activities. The company’s oil exploration efforts have yielded positive results, particularly with the Mopane discovery in the Orange Basin, offshore Namibia. This discovery allows Galp to diversify its global presence with the potential to become a significant oil producer in the region. It is engaged in refining and marketing of oil products and natural gas marketing and sales.
FuelCell Energy is a clean energy company that offers scalable, reliable, low-carbon power solutions. It produces power using flexible fuel sources such as biogas, natural gas and hydrogen. The company’s proprietary molten carbonate fuel cell systems generate electricity through an electrochemical process instead of burning fuel, reducing carbon emissions and minimizing the environmental impact of power generation. FCEL is anticipated to play a crucial role in the energy transition by enabling industries and communities to shift from traditional fossil fuels to low-carbon alternatives.
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W&T Offshore Q1 Earnings Miss on Lower Commodity Price Realizations
Key Takeaways
W&T Offshore, Inc. (WTI - Free Report) posted break-even first-quarter 2026 earnings per share, compared with the Zacks Consensus Estimate of 2 cents. Revenues of $150.0 million beat the consensus mark of $137.0 million by 9.5% and increased 15.5% year over year.
Operationally, the offshore producer turned in average sales volumes of 36.2 MBoe/d (53% liquids), keeping output near the top end of guidance despite adverse weather. The quarter also featured sharply lower lease operating expenses per barrel, helping support a meaningful step-up in profitability measures such as Adjusted EBITDA.
W&T Offshore, Inc. Price, Consensus and EPS Surprise
W&T Offshore, Inc. price-consensus-eps-surprise-chart | W&T Offshore, Inc. Quote
WTI's Commodity Price Realizations
Before realized derivative settlements, the average realized sales price was $45.08 per Boe. Oil realized $69.52 per barrel, natural gas realized $5.41 per Mcf and NGLs realized $16.26 per barrel, with the combined oil-equivalent price down 3% from the year-ago quarter’s $46.50 per Boe.
W&T Offshore Shows Solid Liquids-Weighted Output
Production growth remained a key operational theme. The company said first-quarter output increased 19% from the year-ago period, supported by contributions from prior acquisitions and continued execution across its Gulf of America asset base.
Total oil and natural gas sales volumes were 3,259 thousand barrels of oil equivalent (Mboe), including 1,296 thousand barrels (MBbls) of oil, 425 MBbls of NGLs and 9,223 million cubic feet per day (MMcf) of natural gas. This is comparable with the prior year sales figure of 2,744 Mboe, which includes 1,230 MBbls, 200 MBbls of NGLs and 7,884 MMcf of natural gas. The production mix leaned toward liquids, with oil representing 40% of volumes and NGLs 13%, while natural gas contributed the remaining 47%.
WTI Lowers LOE as Cost Initiatives Take Hold
Expense control stood out as a counterweight to a choppy operating environment offshore. Lease operating expenses (LOE) were $66.1 million, below the midpoint of guidance and 7% lower than the prior-year quarter despite higher production.
On a per-unit basis, LOE fell 22% to $20.29 per Boe from $25.88 a year ago. Management attributed the improvement to lower base LOE spend, cost-saving measures that began to materialize during the quarter and favorable commodity price-driven input costs.
W&T Offshore Sees Derivatives Weigh on Results
While operating trends improved, derivatives created a meaningful drag on reported profitability. W&T recorded a net derivative loss of $24.5 million, including $21.8 million of unrealized losses tied to changes in the fair value of open contracts and $2.7 million of realized losses.
As a result, the company reported a net loss of $22.5 million, compared with a net loss of $30.6 million in the year-ago quarter.
WTI Generates Free Cash Flow, Holds Liquidity
Cash generation strengthened alongside the operational and cost progress. W&T delivered free cash flow of $21.0 million, a sharp improvement from the negative free cash flow of $11.2 million in the prior quarter. The improvement reflects higher adjusted earnings power and lower capital spending in the period.
Liquidity remained solid at quarter's end. As of March 31, 2026, the company had cash, cash equivalents and restricted cash of of $130.9 million and net debt of $220.3 million. W&T also maintained its shareholder return framework, declaring a second-quarter 2026 dividend of $0.01 per share payable May 28, 2026, to shareholders of record on May 21.
WTI’s 2026 Outlook
Looking ahead, management signaled a temporary volume dip for the second quarter tied to a planned third-party Mobile Bay processing facility turnaround. The company expects the event to pressure NGL volumes while boosting natural gas volumes, with normal operations anticipated to resume by early to mid-May.
For the second quarter of 2026, W&T guided to total oil-equivalent production of 2,983-3,319 MBoe, while full-year 2026 production is expected in the 12,227-13,560 MBoe range. The company expects second-quarter lease operating expenses of $72.6-$80.6 million and reaffirmed its full-year capital expenditures outlook of $19.5-$24.5 million, excluding potential acquisitions.
WTI’s Zacks Rank and Other Key Picks
WTI currently carries a Zacks Rank #2 (Buy).
Some other top-ranked stocks from the energy sector are Equinor ASA (EQNR - Free Report) , Galp Energia SGPS SA (GLPEY - Free Report) and FuelCell Energy (FCEL - Free Report) . Equinor currently sports a Zacks Rank #1 (Strong Buy), while Galp Energia and FuelCell carry a Zacks Rank #2 each. You can see the complete list of today’s Zacks Rank #1 stocks here.
Equinor ASA is one of the leading integrated energy companies globally and a major supplier of natural gas in Europe. The recent conflict between the United States and Iran has resulted in a spike in gas prices and disrupted LNG supply, following damage to critical infrastructure in Qatar, tightening global LNG supply. This is expected to boost demand for Eqinor’s gas exports to Europe, positioning the company to benefit from heightened prices. The company’s expansion in the renewable energy space positions it for long-term growth as more countries transition toward cleaner energy solutions to meet their climate goals.
Galp Energia is a Portuguese energy company engaged in exploration and production activities. The company’s oil exploration efforts have yielded positive results, particularly with the Mopane discovery in the Orange Basin, offshore Namibia. This discovery allows Galp to diversify its global presence with the potential to become a significant oil producer in the region. It is engaged in refining and marketing of oil products and natural gas marketing and sales.
FuelCell Energy is a clean energy company that offers scalable, reliable, low-carbon power solutions. It produces power using flexible fuel sources such as biogas, natural gas and hydrogen. The company’s proprietary molten carbonate fuel cell systems generate electricity through an electrochemical process instead of burning fuel, reducing carbon emissions and minimizing the environmental impact of power generation. FCEL is anticipated to play a crucial role in the energy transition by enabling industries and communities to shift from traditional fossil fuels to low-carbon alternatives.