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Capital One Securities 13th Annual Energy Conference – W&T Offshore Inc.

W&T Offshore Inc. · Dec 5, 2018 · 50 slides

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Slides

  1. Capital One Securities 13th Annual Energy Conference – W&T Offshore Inc. – slide 1
    Presentation to Capital One Securities 13th Annual Energy Conference December 5, 2018 Creating Value in the Gulf of Mexico
  2. Capital One Securities 13th Annual Energy Conference – W&T Offshore Inc. – slide 2
    Premium Assets in the Gulf of Mexico Premium GOM company with 35+ Years of Operating History Current (1) Reserve Report (2) Reserves PV-10% Proved reserves: NYSE: WTI 1P: 82.1 MMBOE 1.4 Billion 2P: 145.5 MMBOE 2.4 Billion Market…
  3. Capital One Securities 13th Annual Energy Conference – W&T Offshore Inc. – slide 3
    High Quality Asset Base W&T Key Assets SEC 2P Reserves Mix(1) 2017 Avg. Daily Production(3) By Field By Water Depth 26% Shelf 44% Deepwater 145.5 MMBoe 39.9 MBoed All Other Fields 74% 56% Note: The outer ring of…
  4. Capital One Securities 13th Annual Energy Conference – W&T Offshore Inc. – slide 4
    W&T Shares Outperformed Major Indices 9/27/2018 WTI Launches Senior Notes Offering 3/12/2018 WTI Announces Drilling JV and Heidelberg Acquisition 12/21/2017 WTI Announces Successful Exploration Wells 24% 14% 12% Jan…
  5. Capital One Securities 13th Annual Energy Conference – W&T Offshore Inc. – slide 5
    W&Ts Investment Highlights Generating Significant Capital allocation to high return quick payback projects allowed W&T to generate 294.9 million of operating cash flow in nine months of 2018 Free Cash Flow and High Profit Margins Q3…
  6. Capital One Securities 13th Annual Energy Conference – W&T Offshore Inc. – slide 6
    Gulf of Mexico A Prolific & Unique Basin Better Porosity and Permeability than the Permian Basin Highly prolific basin with multiple stacked pay development opportunities Zone 1 Stacked reservoirs offer attractive primary production…
  7. Capital One Securities 13th Annual Energy Conference – W&T Offshore Inc. – slide 7
    Gulf of Mexico Investment Thesis 2nd Highest Producing Basin in U.S. Provides Unique Advantages Through Low Declining Production and Incremental Reserve Bookings Gulf of Mexico Historical Oil Production Aug. 18 US Oil Production by…
  8. Capital One Securities 13th Annual Energy Conference – W&T Offshore Inc. – slide 8
    W&Ts Strategic Capital Allocation Plan Maintain a prudent balance sheet and use free cash flow to grow opportunistically Inventory Organic Projects Asset Acquisitions Expansion Focus on high rate of Pursue compelling Utilize…
  9. Capital One Securities 13th Annual Energy Conference – W&T Offshore Inc. – slide 9
    Key Corporate Highlights of WTI Over 30 Years of Safe W&Ts 3 year environmental record is 0.095, significantly outperforming the GOM Operations in the average of 10.2 BO/MMBO produced Gulf of Mexico Rigorous review of contractor…
  10. Capital One Securities 13th Annual Energy Conference – W&T Offshore Inc. – slide 10
    Key Corporate Highlights of WTI (contd) Marginal decreases in production through the down cycle despite a substantially Significant Full Cycle reduced capital program Cash Flow Generation Focused on inventory of lower risk/higher…
  11. Capital One Securities 13th Annual Energy Conference – W&T Offshore Inc. – slide 11
    Rigorous Technical Evaluation Resulting in High Drilling Success Rigorous evaluation process has led to only one dry hole over the past four years and 93% success rate since 2011 1 2 3 4 5 Process Technical AFE Leads…
  12. Capital One Securities 13th Annual Energy Conference – W&T Offshore Inc. – slide 12
    Probable and Possible Reserves May Be Produced at No Cost Strong drive mechanisms allow production of reserves with fewer drilled wellbores 13
  13. Capital One Securities 13th Annual Energy Conference – W&T Offshore Inc. – slide 13
    Proven History of Realizing Upside (Wells Drilled from 2013-2017(1)) Post-Drill 1P EUR was 114% higher than Pre-Drill P90/1P EUR estimates Post-Drill 2P EUR was in line with Pre-Drill P50/2P EUR estimates 85% of the Wells Drilled…
  14. Capital One Securities 13th Annual Energy Conference – W&T Offshore Inc. – slide 14
    Proven History of Realizing Probable and Possible Upside (contd)(1) WTI is focused on realizing the reserves upside and adding economic value across three categories: 1 2 3 Prob + Poss Unrelated to 1P Prob + Poss Related to PDP Prob…
  15. Capital One Securities 13th Annual Energy Conference – W&T Offshore Inc. – slide 15
    W&T Reserves Outperform Forecast Actual Results (1) (2) (3) Significant Reserve Growth from Initial NSAI Bookings 100 90 94.2 Current 1P Initial 1P booking 80 Current 1P Initial 3P booking 70 GROSS EUR (MMBoe) 60 59.0…
  16. Capital One Securities 13th Annual Energy Conference – W&T Offshore Inc. – slide 16
    Leveraging GOM Acquisition Expertise & Relationships Gained Over Last 35 Years Gulf of Mexico operators continue to divest attractive assets GOM Exits Bankruptcies Companies exiting the Distressed companies offer GOM provides a…
  17. Capital One Securities 13th Annual Energy Conference – W&T Offshore Inc. – slide 17
    Acquisition Criteria A Proven Approach The Gulf of Mexico provides a large acquisition opportunity set Properties generating cash flow Strong current production rates Opportunity to reduce operating expenses Financeable Large…
  18. Capital One Securities 13th Annual Energy Conference – W&T Offshore Inc. – slide 18
    History of Creating Long-Term Value from GOM Acquisitions(1) TOTAL NEWFIELD WOODSIDE 115 million 206 million 55 million Paid out in Aug. 2011 Paid out in Nov. 2014 Investments Post Acquisition Current net production of 1,000 Boe/d…
  19. Capital One Securities 13th Annual Energy Conference – W&T Offshore Inc. – slide 19
    SS 349 Field (Mahogany) Case Study SS 349 Field (Mahogany) Mahogany Gross Production WI: 100.0%, 360 Water Depth 1st commercially successful subsalt development in the Gulf of Mexico (initial production in 1997) Originally…
  20. Capital One Securities 13th Annual Energy Conference – W&T Offshore Inc. – slide 20
    Total E&P Deepwater Acquisition Case Study Matterhorn Mahogany A-2 Well Production Gross (Gross) Matterhorn & Virgo Fields WI: 64% - 100%, 1,130 - 2,400 water depth Purchased from Total E&P, USA in 2010 115MM acquisition cost…
  21. Capital One Securities 13th Annual Energy Conference – W&T Offshore Inc. – slide 21
    Shell E&P Deepwater Acquisition Case Study VK 783 Field (Tahoe/SE Tahoe) U U WI: 70% - 100%, 1,050 Water Depth Purchased Tahoe and SE Tahoe Fields along U with an ORRI in Droshky Field Included subsea development and two fixed…
  22. Capital One Securities 13th Annual Energy Conference – W&T Offshore Inc. – slide 22
    W&T Deepwater Assets EW910 Virgo 557 1,130 Tahoe 1,001 Medusa Matterhorn Neptune Heidelberg 2,223 2,850 4,216 5,310 P. Play 1,847 1,000 Gladden 2,785 2,000 3,000 4,000 W&Ts Deepwater portfolio is expanding and 5,000…
  23. Capital One Securities 13th Annual Energy Conference – W&T Offshore Inc. – slide 23
    Exploiting Extensive Organic Growth Opportunity Set Adding Value from Opportunities at Producing Fields 50 projects with 82-170 MMBoe net unrisked exploration resource Deep Inventory of potential of select near-term inventory that are…
  24. Capital One Securities 13th Annual Energy Conference – W&T Offshore Inc. – slide 24
    Select Near Term Inventory 50 Identified Prospects with an Est. P10/3P Resource Potential of 170 MMBoe Nearby existing production and available infrastructure W&T Selected Growth Prospects 2 Development Prospects 3 Development…
  25. Capital One Securities 13th Annual Energy Conference – W&T Offshore Inc. – slide 25
    GOM Drilling Joint Venture (Monza) with Private Investors Accelerates Pace to Develop W&Ts High Return Inventory, Leverages Capital Dollars and Maintains Flexibility to Pay Down Debt and Make Acquisitions The Company secured 361.4…
  26. Capital One Securities 13th Annual Energy Conference – W&T Offshore Inc. – slide 26
    Monza Drilling JV - Strategic and Financial Benefits(1)(2) The following analysis assumes that a historical W&T well is retroactively placed into the drilling JV program assuming current strip prices The adjusted pre-JV cash flows are…
  27. Capital One Securities 13th Annual Energy Conference – W&T Offshore Inc. – slide 27
    Key Near Term/Recent Opportunities Low Risk / High Margin All assets aside from Mahogany part LEGEND of Monza JV or eligible to be Main Pass Area Developed Leases included in Monza JV Multiple recompletion opportunities executed…
  28. Capital One Securities 13th Annual Energy Conference – W&T Offshore Inc. – slide 28
    Project Timeline: Key Capital Projects 2017 2018 2019 SS 349 Field (Mahogany) A-5 R A-17 on line. A-5 ST on line. A-17 Com W Com A-19 Com M A-20 Com S/T A-19 Drilled . In Completion. Expect First Oil late Q4 2018. VIRGO A-10 and…
  29. Capital One Securities 13th Annual Energy Conference – W&T Offshore Inc. – slide 29
    Successful Drilling Program at Ship Shoal 349 (Mahogany) SS 349Mahogany SS 349 Mahogany Continued Continued Sub-Salt Sub-Salt Mahogany Field Map and Drilling History Exploration &&Development Exploration Development Success Success…
  30. Capital One Securities 13th Annual Energy Conference – W&T Offshore Inc. – slide 30
    Mahoganys Prolific P & T Sands Mahogany Field has achieved cumulative production of 48.9 Million Boe T Sand is 3,000 feet deeper and better quality than P Sand The A-18 success in 2016 coupled with the performance and pressure history…
  31. Capital One Securities 13th Annual Energy Conference – W&T Offshore Inc. – slide 31
    SS 349 Mahogany A-17 Western Field Extension Well All productive sands are not shown Salt A-17 Well A-17 WELL Western Field Extension Success Exploration/Extension well Western Reservoir tested and extended field Extension…
  32. Capital One Securities 13th Annual Energy Conference – W&T Offshore Inc. – slide 32
    SS 359 A-5 ST: Q sand Completion Mahogany A-5 ST Well (Gross) Development Well; Completed in July 2018 3,000 2,700 Logged pay in P and Q 2,400 Sands 2,100 Gas Single Selective Completion 1,800 Boe/d in P and Q Sands 1,500…
  33. Capital One Securities 13th Annual Energy Conference – W&T Offshore Inc. – slide 33
    SS 359 Mahogany A-19 Well Our Third Producer from the T Sand Drilled to total depth in 3Q 2018 Logged high quality net pay in multiple sands T sand to produce first T sand up-dip from known oil Currently on flowback 34
  34. Capital One Securities 13th Annual Energy Conference – W&T Offshore Inc. – slide 34
    Partial List of Potential Additional Drilling Opportunities W&T was awarded 9 leases (34,578 net acres) and high bidder on an additional 8 leases (38,028 net acres) in Gulf of Mexico Lease Sales in 2018 LEGEND FAIRWAY Developed…
  35. Capital One Securities 13th Annual Energy Conference – W&T Offshore Inc. – slide 35
    Financial Overview
  36. Capital One Securities 13th Annual Energy Conference – W&T Offshore Inc. – slide 36
    2018 Guidance ( in millions) Fourth Quarter Full Year Estimated 2018 Capital Expenditures Production 2018 2018 95 Million Oil and NGL's (MMBbls) 1.9 - 2.1 7.9 - 8.1 Natural Gas (Bcf) 7.4 - 8.2 32.0 - 32.8 Total (Bcfe) 18.8 -…
  37. Capital One Securities 13th Annual Energy Conference – W&T Offshore Inc. – slide 37
    EBITDA(1) Comparison ( in thousands) ADJUSTED EBITDA(1) MARGINS RETURNED TO HISTORIC LEVELS IN 2018 9 Months Ended, Year Ended December 31, 9/30/2018 2017 2016 2015 2014 2013 2012 Net Income (loss) 109,983 79,682 (249,020)…
  38. Capital One Securities 13th Annual Energy Conference – W&T Offshore Inc. – slide 38
    Reserves Summary Current Reserve Report (1) (1) Current Reserve Report (SEC Pricing) Overview Reserve Category Total (Mm boe) % Liquids Pre-Tax PV-10%(2) Proved Developed Producing (PDP) 49.3 55.3% 839.6 Proved Developed…
  39. Capital One Securities 13th Annual Energy Conference – W&T Offshore Inc. – slide 39
    Proactive Management of Asset Retirement Obligations Undiscounted P&A Schedule(1)(2) ( in millions) Accelerating P&A To Capture Resulting in Low ARO 250.0 Low Costs Burden Over Next 5 Years WTI took advantage of low service…
  40. Capital One Securities 13th Annual Energy Conference – W&T Offshore Inc. – slide 40
    Hedging Strategy Protects Cash Flow Without Limiting Upside Over 75% of 4th quarter oil production is protected in a lower oil price scenario with an average floor price of 60.05 and we have 10,000 bbls/day of oil production hedged in…
  41. Capital One Securities 13th Annual Energy Conference – W&T Offshore Inc. – slide 41
    Conclusion Over 30 Years of Safe Operations in the Gulf of Mexico Rigorous Technical Evaluation Resulting in High Drilling Success Proven History of Realizing Probable and Possible Upside Low Organic F&D Costs Driven…
  42. Capital One Securities 13th Annual Energy Conference – W&T Offshore Inc. – slide 42
    Additional Slides
  43. Capital One Securities 13th Annual Energy Conference – W&T Offshore Inc. – slide 43
    SS 300 B-5 ST Successful Field Extension Well New fault block field extension well. Risked by prolific offset Field Extension into undrilled fault block Prolific offset fault block (large with low risk) production and seismic High…
  44. Capital One Securities 13th Annual Energy Conference – W&T Offshore Inc. – slide 44
    VK823 VIRGO: 2018 Drilling Program VIRGO Program Multiple well drilling program off Virgo deepwater platform Additional 5-8 locations Prospects & Mobilized Rig late 17 Locations Low risk: well control, 3D and amplitudes Program…
  45. Capital One Securities 13th Annual Energy Conference – W&T Offshore Inc. – slide 45
    VIRGO VK822: A-10 ST Well (Well 1 in 2018 drilling program) J/L Sand Reservoir VIRGO A-10 ST JL Upper: 113 Pay MD (76 Pay TVD) A-10ST 300 Gross Hydrocarbon Interval MD JL Stray JL Upper Downdip well control WI: W&T…
  46. Capital One Securities 13th Annual Energy Conference – W&T Offshore Inc. – slide 46
    VIRGO VK779: A-12 (Well 2 in 2018 drilling program) ROB E-5 RESERVOIR VIRGO A-12 A-12 ROB E-5: 112.5 Pay MD (330 MD column) A-3 CUM: 28 BCF ROB E-5 and 499 MBO A-12 WELL Drilled August 11, 2018. 112 MD pay in ROB E-5…
  47. Capital One Securities 13th Annual Energy Conference – W&T Offshore Inc. – slide 47
    Ewing Bank 910 - Phase II Drilling Program initiated in early 2018 EW 910 Expansion(1)(2) PHASE II ST320 A-2 & Deepwater platform A-3 wells Characterization: Low F&D costs; 100% rate of Producing field A3 A2 return; low risk…
  48. Capital One Securities 13th Annual Energy Conference – W&T Offshore Inc. – slide 48
    Proven History of Realizing Probable and Possible Upside (contd) WTI Has Consistently Maintained a 5 Year Reserve Life For Nearly Two Decades(1) 7.4 yrs Average Reserve Life: 5.5 yrs 6.9 yrs 6.6 yrs 2P 6.0 yrs 5.8 yrs 5.6 yrs…
  49. Capital One Securities 13th Annual Energy Conference – W&T Offshore Inc. – slide 49
    Experienced Leadership Team Name Position Prior Companies Years of Experience Years With WTI Founder, Chairman Mobil Tracy W. Krohn 45 Years 35 Years & CEO Taylor Energy Allegheny Energy Janet Yang EVP, CFO & CAO Raymond James…
  50. Capital One Securities 13th Annual Energy Conference – W&T Offshore Inc. – slide 50
    Nine Greenway Plaza, Suite 300 Houston, TX 77046 Main line: 713-626-8525 Investor Relations: 713-297-8024 www.wtoffshore.com investorrelationswtoffshore.com

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