Q1 2024 W&T Offshore Inc Earnings Call Transcript
Key Points
- W&T Offshore Inc reported a strong start to 2024 with solid operational and financial results, continuing to generate positive free cash flow for the 25th consecutive quarter.
- The company successfully integrated newly acquired Gulf of Mexico fields, which immediately contributed to a 30% increase in production and a 15% increase in oil production from the previous quarter.
- Adjusted EBITDA increased to $49.4 million, a 10% increase quarter-over-quarter, outpacing the 3% increase in production, benefiting from higher oil production.
- W&T Offshore Inc maintains a strong balance sheet with significant cash on hand, which facilitated the strategic acquisition of the Cox assets.
- The company continues to focus on cost control, recording lease operating expenses below the guidance range and generating $32 million in free cash flow, more than double the previous quarter.
- Three of the newly acquired fields were shut in during the first quarter, delaying their expected positive impact on the company's operational and financial results.
- There are ongoing challenges with integrating the Cox assets, including necessary remediation work primarily around corrosion due to inadequate maintenance by the previous operator.
- The company anticipates higher lease operating expenses in the second quarter due to deferred projects from the first quarter and necessary maintenance work.
- Operational costs and general and administrative expenses are expected to rise initially with the integration of new acquisitions, which could impact short-term profitability.
- While W&T Offshore Inc has a strategy for growth through acquisitions, the integration process involves significant effort and resources, which could divert focus from other operational areas.
Ladies and gentlemen, thank you for standing by, and welcome to the W&T Offshore first quarter 2024 conference call. During today's call, all parties will be in a listen-only mode. Following the company's prepared comments, the call will be opened for questions and answers.
During the question and answer session, we ask that you limit your questions to one and one follow-up and you can always rejoin the queue. This conference call is being recorded and a replay will be made available on the company's website following the call.
I would now like to turn the conference over to Mr. Al Petrie of Investor Relations Coordinator. Please go ahead, sir.
Thank you, Chuck. And on behalf of the management team, I'd like to welcome all of you to today's conference call to review W&T Offshore's first quarter 2024 financial and operational results.
Before we begin, I would like to remind you that our comments may include forward looking statements. It should be noted that a
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