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An independent oil and gas producer, W&T Offshore, Inc. (WTI - Free Report) has allotted around $450 million as its capital budget for 2013.

W&T plans to spend the majority of its capital (around 63% or $283.5 million) towards exploratory drilling with an aim to push organic growth in both reserves and production. This amount will be allocated for the projects in the Gulf of Mexico, both on the shelf and in the deepwater. The remaining 37% or $166.5 million will go towards projects onshore Texas.

The company entered 2013 with a high level of activity, having completed SS 349 A-9 in the Mahogany field, MC 698 #1 in the Big Bend and MP 163 #1 during the fourth quarter of 2012. In the ongoing first quarter, it started drilling the SS 349 A-14, the sixth well in its multi-well drilling program at its Mahogany field.  Other wells, where drilling operations are ongoing include MC 243 A-2 ST in the Matterhorn field, SS 349 A-14 in the Mahogany field and MP 159#1.

In 2013, W&T expects to drill exploration wells – MP 108 B-2, MC 243 A-5 in the Matterhorn field, SS 349 A-15 in the Mahogany field and HI 21 A-1.

The success attained by the company in both the Wolfcamp horizontal drilling program and the 40-acre infill spacing has added significant value to W&T’s Yellow Rose project in the Permian Basin in its Onshore segment. During 2013, W&T expects to drill 7 horizontal and 20 vertical wells. Currently, it has 2 rigs operational in the field.

W&T also forecasts its production for the first quarter of 2013 and full-year 2013 in the range of 4.3 million barrels of oil equivalent (MMBoe) to 4.8 MMBoe and 17.0 MMBoe to 18.7 MMBoe, respectively.

W&T holds a Zacks Rank #3, which is equivalent to a short-term Hold rating. However, other stocks in the oil and gas sector like Cabot Oil & Gas Corporation (COG - Free Report) , Range Resources Corporation (RRC - Free Report) and Penn Virginia Corporation hold a Zacks Rank #1 (Strong Buy) and are expected to perform better.

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