W&T Offshore lowers cap ex spending in 2015, postpones dividend due to market conditions

By Lisa Kerner

Charlotte, N.C., March 5 – W&T Offshore, Inc. plans to conserve capital and preserve liquidity in the current lower-commodity-price environment, according to chairman and chief executive officer Tracy W. Krohn.

The Houston-based independent oil and natural gas producer company is working to cut costs and expenses, as well as to manage its balance sheet, Krohn said.

W&T has suspended its quarterly stock dividend and has the flexibility to postpone spending until its “operating margins return to more normal levels,” Krohn said.

The company’s capital expenditure budget for 2015 is currently set at $200 million. Capital expenditures totaled $630 million in 2014 and about $636 million in 2013.

At year-end, W&T had a cash balance of $23.7 million and $302.4 million of undrawn capacity available under its revolving bank credit facility. The facility, with a $750 million borrowing base, was reaffirmed effective Oct. 22, according to the earnings release.

Long-term debt at year-end was $1.36 billion, compared to $1.21 billion at the end of 2013.

W&T’s 2014 revenues were about $949 million, 76.5% of which were from oil and NGLs. Revenues were down from $984 million in 2013.

Adjusted EBITDA was $569 million for 2014, down about $38 million from the prior year. Adjusted EBITDA margin was 60%, compared to 62% for 2013.

Net cash provided by operating activities for the 12 months ended Dec. 31 was about $511 million. This compares to about $561 million for the same period in 2013.

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