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W&T Offshore Q3 Loss Narrower Than Expected, Revenues Decline Y/Y
W&T Offshore Inc. WTI reported a third-quarter 2024 loss of 17 cents per share (excluding one item), narrower than the Zacks Consensus Estimate of a loss of 19 cents. However, the bottom line declined from the year-ago quarter’s reported earnings of 1 cent per share.
Total quarterly revenues of $121.4 million missed the Zacks Consensus Estimate of $136 million. The top line also decreased from $142.4 million reported in the prior-year quarter.
Increased realized price of natural gas liquids aided the company’s bottom line in the reported quarter. This was partially offset by lower oil equivalent production and higher operating expenses.
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
Production Statistics
Production for the quarter averaged 31 thousand barrels of oil equivalent per day (MBoe/d), down from 35.9 MBoe/d in the corresponding period of 2023. The reported metric came in lower than our estimate of 34.2 Mboe/d. The production was affected by temporary disruptions due to hurricanes and third-party downtime. The year-over-year deterioration was also due to the shutdown of two of the six fields that the company acquired in January this year.
Oil production totaled 1,210 thousand barrels (MBbls), down from 1,227 MBbls in the year-ago quarter. The figure also missed our estimate of 1,311 MBbls.
Natural gas liquids output totaled 262 MBbls, which decreased from the year-ago quarter’s level of 348 MBbls. Our estimate for the same was pinned at 292 MBbls.
Natural gas production of 8,289 million cubic feet (MMcf) was lower than 10,359 MMcf in the prior-year quarter. The figure also missed our estimate of 9,282 MMcf.
Realized Commodity Prices
The average realized price for oil in the third quarter was $75.09 per barrel, lower than the year-ago quarter’s level of $81.77. Our estimate for the same was pegged at $77.21.
The average realized price of NGL increased to $21.51 per barrel from $21.31 in the third quarter of 2023. The figure came in lower than our estimate of $30.58 per barrel.
The average realized price of natural gas in the June-end quarter was $2.79 per thousand cubic feet, down from $3.14 in the corresponding period of 2023 and below our estimate of $3.48.
The average realized price for oil-equivalent output decreased to $41.92 per barrel from $42.48 a year ago. The figure missed our estimate of $45.22 per barrel.
Operating Expenses
Lease operating expenses increased to $25.37 per Boe from $18.72 in the year-ago period. The reported figure was lower than our estimate of $26.15 per Boe.
Also, general and administrative expenses increased to $6.91 per Boe from $6.05 a year ago. The figure was higher than our estimate of $6.33 per Boe.
Cash Flow
Net cash from operations totaled $14.8 million, down from $30 million in the year-ago quarter.
The free cash flow decreased substantially to $3.9 million from $25.4 million in the year-earlier quarter.
Capital Spending & Balance Sheet
W&T Offshore spent $4.5 million on oil and gas resources and equipment.
As of June 30, 2024, the company’s cash and cash equivalents totaled $126.5 million, and net long-term debt amounted to $371.6 million. The current portion of the long-term debt is $21 million.
Guidance
For the fourth quarter of 2024, W&T Offshore expects production to be in the band of 2,927- 3,253 Mboe. For 2024, its production is anticipated to be in the 11,900-13,267 Mboe range. Further, the company plans to spend more on lease operating expenses in the fourth quarter compared to the third quarter of 2024. W&T Offshore also updated its full-year capital expenditure guidance to $25-$35 million (previously: $35-$45 million).
WTI’s Zacks Rank and Key Picks
Currently, WTI carries a Zacks Rank #4 (Sell).
Some better-ranked stocks in the energy sector are Archrock Inc. AROC, The Williams Companies, Inc. WMB and FuelCell Energy FCEL. Archrock presently sports a Zacks Rank #1 (Strong Buy), while The Williams Companies and FuelCell Energy carry a Zacks Rank #2 (Buy) each. You can see the complete list of today’s Zacks #1 Rank stocks here.
Archrock is an energy infrastructure company based in the United States, with a focus on midstream natural gas compression. It provides natural gas contract compression services and generates stable fee-based revenues.
The Williams Companies is a premier energy infrastructure provider in North America. The company’s core operations include finding, producing, gathering, processing, and transporting natural gas and natural gas liquids. Boasting a widespread pipeline system of more than 33,000 miles, Williams is one of the largest domestic transporters of natural gas by volume.
FuelCell Energy is a clean energy company offering low-carbon energy solutions. It produces power using flexible fuel sources such as biogas, natural gas and hydrogen. The company designs fuel cells that generate electricity through an electrochemical process that combines fuel with air, reducing carbon emissions and minimizing the environmental impact of power generation. As such, 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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