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Lehman Brothers 2007 High Yield Bond Syndicated Loan Conference – W&T Offshore Inc.

W&T Offshore Inc. · Mar 27, 2007 · 35 slides

Investor presentation from the Shale Experts oil & gas presentation and slide database. Every page is imaged and its text indexed for search across operators, plays, basins and time.

Slides

  1. Lehman Brothers 2007 High Yield Bond Syndicated Loan Conference – W&T Offshore Inc. – slide 1
    Confidential W&T Offshore, Inc. Lehman Brothers 2007 High Yield Bond Syndicated Loan Conference
  2. Lehman Brothers 2007 High Yield Bond Syndicated Loan Conference – W&T Offshore Inc. – slide 2
    Confidential W&T Offshore, Inc. Lehman Brothers 2007 High Yield Bond Syndicated Loan Conference
  3. Lehman Brothers 2007 High Yield Bond Syndicated Loan Conference – W&T Offshore Inc. – slide 3
    W&Ts Business Strategy, Part I How We Got Here 1. Generate high return on equity focusing on GOM assets 2. Enhance returns and growth rate through the drill bit Large prospect inventory generated from high held-by-production position 3.…
  4. Lehman Brothers 2007 High Yield Bond Syndicated Loan Conference – W&T Offshore Inc. – slide 4
    W&Ts Business Strategy, Part II Deeper and Deeper and Deeper in Deeper Continued long-term success for W&T will depend on our success in finding oil and gas reserves as we move further away from the shoreline or drill deeper under the…
  5. Lehman Brothers 2007 High Yield Bond Syndicated Loan Conference – W&T Offshore Inc. – slide 5
    Myths vs. Facts about W&T Offshore Myths Myths Facts Facts 1. 100% Leverage to Natural Gas 1. Actually, W&T was 39% Crude Production Oil/NGL production for full year 2006 and 36% for 4th Quarter 2006 2. Lack of prospects in KMG 2.…
  6. Lehman Brothers 2007 High Yield Bond Syndicated Loan Conference – W&T Offshore Inc. – slide 6
    W&T versus Peers
  7. Lehman Brothers 2007 High Yield Bond Syndicated Loan Conference – W&T Offshore Inc. – slide 7
    Reserve Growth Leads to Cash 2002-2006 CAGR: Reserve Growth 2002-2006 CAGR: Production Growth 20% 18% 16% 35% 29% 15% 30% 11% 11% 25% 10% 20% 10% 20% 15% 5% 8% 10% 5% 5% 0% 0% -5% -5% -10% -6% -7% -11% -10% -15% ATPG WTI BDE…
  8. Lehman Brothers 2007 High Yield Bond Syndicated Loan Conference – W&T Offshore Inc. – slide 8
    Lower Costs and Focus = Higher LT Margins 2002-2006 Average Expenses per Mcfe % Oil Production and GOM Focus 3.00 2.91 2.78 50% 100% 100% 85% 100% 85% 86% 2.50 2.38 45% 90% 74% 40% 80% 1.87 % Oil/Liquids Production for 2006…
  9. Lehman Brothers 2007 High Yield Bond Syndicated Loan Conference – W&T Offshore Inc. – slide 9
    2002-2006 ROACE Weighted Average Peers Everyone Else 40% 80% 35% 71% 35% 70% 30% 60% 24% 25% 50% 20% 40% 37% 35% 31% 30% 29% 15% 13% 12% 30% 10% 10% 20% 14% 5% 3% 10% 7% 3% 0% 0% WTI BDE EPL SGY CPE ATPG GOOG XOM WTI SBUX…
  10. Lehman Brothers 2007 High Yield Bond Syndicated Loan Conference – W&T Offshore Inc. – slide 10
    Operations
  11. Lehman Brothers 2007 High Yield Bond Syndicated Loan Conference – W&T Offshore Inc. – slide 11
    Integration of KMG Operations Integration of KMG is our Number 1 priority for 2007 Assumed operations on October 1 36 of 37 KMG operators accepted positions with W&T Purchasing new seismic Transition P&A and compressor installation…
  12. Lehman Brothers 2007 High Yield Bond Syndicated Loan Conference – W&T Offshore Inc. – slide 12
    Operated Rig Analysis Our proposed 2007 drilling plan includes approximately 18 wells Rig types by level of complexity Types of rigs necessary for proposed 2007 drilling program. 12 12
  13. Lehman Brothers 2007 High Yield Bond Syndicated Loan Conference – W&T Offshore Inc. – slide 13
    Confidential Acquisition Overview
  14. Lehman Brothers 2007 High Yield Bond Syndicated Loan Conference – W&T Offshore Inc. – slide 14
    Winning Acquisition Strategy Key to our successful strategy is our ability to target under-exploited assets Key Acquisition Factors Kerr-McGee Example 1. Cash Flow KMG has strong production rates, including several behind pipe,…
  15. Lehman Brothers 2007 High Yield Bond Syndicated Loan Conference – W&T Offshore Inc. – slide 15
    Transaction History Ability to overcome natural decline rates Strong acquire and exploit capabilities Annual Reserves 2003 YE 2004 YE 2005 YE 2006 YE Acquisition (date) Compound Acq'd Reserves Reserves Reserves Reserves Change (1)…
  16. Lehman Brothers 2007 High Yield Bond Syndicated Loan Conference – W&T Offshore Inc. – slide 16
    Volumes - Report Card 2X initial reserve bookings 686 Bcfe 700 600 Initial 351 Bcfe of Booked 351 Bcfe Production from Reserves Transactions 500 (Aggregate 686 Bcfe Total Net at Estimated Transaction) 400 Recovery Includes…
  17. Lehman Brothers 2007 High Yield Bond Syndicated Loan Conference – W&T Offshore Inc. – slide 17
    Dollars - Report Card Value1,750 created from Major Transactions since 1999 ( in millions) 1,500 Probable and Possible: 1,386 Probable: 102 Bcfe 423 MM PV-10 1,250 Possible: 126 Bcfe 424 MM PV-10 1,000 PV-10 Value 907 at…
  18. Lehman Brothers 2007 High Yield Bond Syndicated Loan Conference – W&T Offshore Inc. – slide 18
    Confidential Reserves Overview
  19. Lehman Brothers 2007 High Yield Bond Syndicated Loan Conference – W&T Offshore Inc. – slide 19
    Net Proved Reserves December 31, 2006 Net Proved Reserves Breakdown Oil Gas Total PV-10 (3) (Bcfe) (MMBbls) (Bcf) (Bcfe) (In millions) Net Proved Reserves:(1) Proved Developed Producing (PDP) 11.5 156.4 225.3 741.3 PDNP PUD 34%…
  20. Lehman Brothers 2007 High Yield Bond Syndicated Loan Conference – W&T Offshore Inc. – slide 20
    2006 Reserves and Production by Product Net Proved Reserves by Product Production by Product (Bcfe) (Bcfe) Oil Oil 45% 39% Gas Gas 55% 61% Bcfe % Bcfe % Gas 401.2 55% Gas 60.4 61% Oil 334.0 45% Oil 38.8 39% Total…
  21. Lehman Brothers 2007 High Yield Bond Syndicated Loan Conference – W&T Offshore Inc. – slide 21
    History of reserve growth 800.0 Oil & NGLs (Bcfe) 00 0-2006 735.2 R2 Natural Gas (Bcf) CAG 23% 600.0 491.5 334.0 444.7 467.6 400.0 357.5 213.6 240.0 275.6 245.7 138.6 207.4 200.0 91.2 401.2 103.8 219.0 231.1 227.6…
  22. Lehman Brothers 2007 High Yield Bond Syndicated Loan Conference – W&T Offshore Inc. – slide 22
    ... and production growth 100.0 Oil & NGLs (Bcfe) 000-2006 99.2 R2 CA G Natural Gas (Bcf) 27% 82.4 80.0 79.0 38.8 71.1 26.2 29.1 60.0 54.2 24.5 42.3 14.8 40.0 13.9 23.8 52.8 53.3 60.4 20.0 39.4 46.6 11.4 28.4 12.4 0.0…
  23. Lehman Brothers 2007 High Yield Bond Syndicated Loan Conference – W&T Offshore Inc. – slide 23
    Constant Reserve Life Profile Trend of Reserve Life 10.0 8.7 8.0 7.4 6.9 6.3 6.6 Wtd Average 5.6 5.7 5.8 Proved Reserve / 6.0 Production - 6.7 4.8 4.5 4.1 4.2 Wtd Average 4.0 3.7 3.5 Proved Developed Reserve / Production…
  24. Lehman Brothers 2007 High Yield Bond Syndicated Loan Conference – W&T Offshore Inc. – slide 24
    Proved Reserve Bookings Example Well Up dip Potential Gas Proved Reserve Bookings Lowest known gas Non Proved Gas Down dip potential Water 24 24
  25. Lehman Brothers 2007 High Yield Bond Syndicated Loan Conference – W&T Offshore Inc. – slide 25
    Proved Reserve Bookings - Pluto MC 718 A A Lowest Known Gas Amplitude Limit & Amplitude Limit & Estimated Estimated Gas/Water Contact Gas/Water Contact 3-D Seismic Courtesy of WesternGeco 25 25
  26. Lehman Brothers 2007 High Yield Bond Syndicated Loan Conference – W&T Offshore Inc. – slide 26
    Pluto MC 718 3 M1:50 Deepwater Sand Initial production in mid-September 2006 Current Rate 28.0 MMcfe/d Gross (11.0 MMcfe/d net) Example of limited proved reserve bookings 5.3 Bcfe Net of positive revisions at year end…
  27. Lehman Brothers 2007 High Yield Bond Syndicated Loan Conference – W&T Offshore Inc. – slide 27
    Confidential Drilling Overview
  28. Lehman Brothers 2007 High Yield Bond Syndicated Loan Conference – W&T Offshore Inc. – slide 28
    Development and Exploration Success In 2006, W&T continued its strong performance with total average success rate of 79% Development Drilling Exploration Drilling 35 100% 100% 9 100% 100% 100% 30 11 2006 8 86% 86% 86% 83% 75%…
  29. Lehman Brothers 2007 High Yield Bond Syndicated Loan Conference – W&T Offshore Inc. – slide 29
    Projects for 2007 WEST CAMERON 180 - KMG HIGH ISLAND 22 - KMG Drilling completed 1Q 2007 SHIP SHOAL 217 - KMG Mobile Viosca Knoll HIGH ISLAND 24L Main W. SHIP SHOAL 256 Main - KMG Pass Cameron Pass S. and E. Grand Isle…
  30. Lehman Brothers 2007 High Yield Bond Syndicated Loan Conference – W&T Offshore Inc. – slide 30
    Production Visibility Only includes recent exploration and development projects. Does not include any projected drilling programs Project Name Category WI Q1 2007 Q2 2007 Q3 2007 East Cameron 321 Shelf 100% 20.8 MMcfe/day Ewing Bank…
  31. Lehman Brothers 2007 High Yield Bond Syndicated Loan Conference – W&T Offshore Inc. – slide 31
    Capital Expenditures 2006 2006 Program Program by by Category Category 2007E 2007E Program Program by by Category Category Exploration Exploration 46% 37% Seismic 8% Development 54% Development 55% (Dollars in…
  32. Lehman Brothers 2007 High Yield Bond Syndicated Loan Conference – W&T Offshore Inc. – slide 32
    Credit Statistics ( in millions, except as noted) 2006 2005 Net Debt/Adjusted EBITDA 1.01x -0.31x Total Debt/Book Capitalization Ratio 39.6% 6.9% Net Debt/Net Capitalization Ratio 38.2% -37.3% Total Debt/Proved Reserves ( / Mcfe) 0.93…
  33. Lehman Brothers 2007 High Yield Bond Syndicated Loan Conference – W&T Offshore Inc. – slide 33
    Confidential Closing Comments
  34. Lehman Brothers 2007 High Yield Bond Syndicated Loan Conference – W&T Offshore Inc. – slide 34
    Conclusions High cash-on-cash return Superior Metrics vs. Peers Premium valuation justified Proven Track-Record of Acquiring and Exploiting Opportunity and size of Future Transactions Large inventory of prospects Favorable…
  35. Lehman Brothers 2007 High Yield Bond Syndicated Loan Conference – W&T Offshore Inc. – slide 35
    Confidential W&T Offshore, Inc. Lehman Brothers 2007 High Yield Bond Syndicated Loan Conference

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