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W&T Offshore (WTI) Q4 Earnings Beat Estimates, Reserves Grow

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W&T Offshore, Inc. (WTI - Free Report) reported fourth-quarter 2019 adjusted earnings (excluding one-time items) of 17 cents per share, beating the Zacks Consensus Estimate of a cent but declining from the year-ago 24 cents.

Meanwhile, quarterly revenues increased to $152 million from $143 million a year ago. Moreover, the top line beat the Zacks Consensus Estimate of $151 million.

The better-than-expected results were supported by higher oil equivalent production volumes and lower lease operating expenses, partially offset by a decline in average realized prices of commodities. Along with the quarterly results announcement, the offshore producer announced plans of buying the remaining 25% working interest in the Magnolia field by early 2020.

W&T Offshore, Inc. Price, Consensus and EPS Surprise

 

W&T Offshore, Inc. Price, Consensus and EPS Surprise

W&T Offshore, Inc. price-consensus-eps-surprise-chart | W&T Offshore, Inc. Quote

Overall Production Rises

Total oil equivalent production averaged 52,773 barrels of oil equivalent per day (Boe/d), up 51% from 35,000 Boe/d in the year-ago quarter. Oil production was recorded at 1.8 million barrels (MMBbls), up 6.1% year over year. Natural gas liquids output totaled 415 MBbls, higher than 322 MBbls a year ago. Natural gas production of 15,966 million cubic feet (MMcf) in the reported quarter was considerably higher than 7,343 MMcf in the year-earlier period. Of the total production in the quarter, 45.2% comprised liquids.

The rise in production was supported by the company’s Mobile Bay area assets acquisition from Exxon Mobil Corporation (XOM).

Realized Prices Decline

The average realized price for oil during the fourth quarter was $56.84 a barrel, lower than the year-ago level of $62.94. The average realized price of NGL dropped to $16.64 from $26.84 per barrel in the prior year. The average realized price of natural gas during the December quarter was $2.58 per thousand cubic feet, down from $3.83 per thousand cubic feet in the comparable period last year. Average realized price for oil equivalent output declined to $30.75 per barrel from $44.15 a year ago.

Operating Expenses

Lease operating expenses contracted to $10.98 per Boe in the fourth quarter from $13.48 a year ago.

Capital Spending & Balance Sheet

W&T Offshore spent $32.2 million capital through the December quarter on oil and gas resources.

As of Dec 31, 2019, the company had approximately $32.4 million in cash and cash equivalents. It also had $139.2 million remaining under its revolving bank credit facility. The company had $719.5 million in long-term debt.

Proved Reserves Grow

As of Dec 31, 2019, the company reported proved reserves at 157.4 MMBoE, up 87% from 2019-end reserves of 84 MMBoE.

Guidance

W&T Offshore expects production for first-quarter 2020 within 49,600-54,800 Boe/d. For the full year, its production view is pegged at 47,100-52,100 Boe/d, compared with last year’s 40,600 Boe/d.  

Full-year 2020 capital expenditures, excluding acquisitions, are projected in the range of $50-$100 million, lower than last year’s $125.7 million.

Zacks Rank & Stocks to Consider

W&T Offshore currently carries a Zacks Rank #3 (Hold). Meanwhile, a few-better ranked players in the energy sector are Precision Drilling Corporation (PDS - Free Report) , Antero Resources Corporation (AR - Free Report) and Hess Corporation (HES - Free Report) . While Hess carries a Zacks Rank #2 (Buy), Precision Drilling and Antero sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Precision Drilling beat the Zacks Consensus Estimate for earnings in the last four reported quarters.

Antero is likely to see earnings growth of more than 270% in 2020.

Hess’ bottom line for 2020 is expected to climb 93.7% year over year.

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