SEC Filings

W&T OFFSHORE INC filed this Form 10-Q on 05/04/2017
Entire Document


Capital Expenditure Budget and Expected Production for 2017.  With consideration of the current commodity price environment and the outlook for the remainder of 2017, we have set our initial 2017 capital expenditure budget at $125.0 million, which excludes potential acquisitions.  Although this is an increase from the $48.6 million capital expenditures incurred in 2016, our current plan for 2017 is a significant reduction from 2015 and 2014 investment levels of $231.4 million and $630.0 million, respectively.  We have flexibility in our 2017 capital expenditure budget as we have no long term rig commitments and no pressure from co-owners to drill or complete a well.  Our 2017 production is expected to be positively impacted by the Ewing Bank 910 A-8 well, which began producing during March 2016 and had a workover performed in October 2016, the Mahogany A-18 well, which began producing in January 2017, and the Mahogany A-16 BP1 well, which began producing in April 2017.  Some of our expenditures planned for the remainder of 2017 are expected to impact production for 2017, while most are expected to impact 2018 production and beyond.  We expect 2017 production to be slightly higher than 2016, but factors such as natural production declines, unplanned downtime and well performance could lead to lower production in 2017.  We continue to closely monitor current and forecasted prices to assess if changes are needed to our plans.

Income Taxes.  During the three months ended March 31, 2017, we did not make any income tax payments or receive any refunds of significance.  As of March 31, 2017, we recorded current income tax receivables of $11.9 million and non-current income tax receivables of $59.8 million.  The current income tax receivables relates primarily to an NOL claim for 2016 carried back to 2006.  The non-current income taxes receivables relates to our NOL claims for the years 2012, 2013 and 2014 that were carried back to prior years filed on Form 1120X, U.S. Corporation Income Tax Return and to an estimated NOL claim for 2017 that is expected to be filed subsequent to December 31, 2017.  These receivables relate to claims made pursuant to IRC Section 172(f), (related to rules for “specified liability losses”) which permits certain platform dismantlement, well abandonment and site clearance costs to be carried back 10 years.  See Financial Statements – Note7 –Income Taxes under Part I, Item 1 of this Form 10-Q for additional information.

Asset Retirement Obligations.  Each quarter, we review and revise our ARO estimates.  Our ARO at March 31, 2017 and December 31, 2016 were $326.8 million and $334.4 million, respectively.  Our plans include spending $78.3 million in 2017 for ARO compared to $72.3 million spent on ARO in 2016.  As our ARO are estimates for work to be performed in the future, and in the case of our non-current ARO, are for many years in the future, actual expenditures could be substantially different than our estimates.  See Risk Factors, under Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2016 for additional information.    

Contractual Obligations.  Updated information on certain contractual obligations is provided in Financial Statements – Note 2 – Long-Term and Note 4 – Asset Retirement Obligation, and under Part I, Item 1 of this Form 10-Q.  As of March 31, 2017, drilling rig commitments, excluding ARO drilling rig commitments, were approximately $4.2 million compared to $4.4 million as of December 31, 2016.  Except for scheduled utilization, other contractual obligations as of March 31, 2017 did not change materially from the disclosures in Management’s Discussion and Analysis of Financial Condition and Results of Operations, under Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2016.

Critical Accounting Policies

Our significant accounting policies are summarized in Financial Statements and Supplementary Data under Part II, Item 8 of our Annual Report on Form 10-K for the year ended December 31, 2016.  Also refer to Financial Statements - Note 1 - Basis of Presentation under Part 1, Item 1 of this Form 10-Q.  

Recent Accounting Pronouncements

See Financial Statements - Note 1 - Basis of Presentation under Part 1, Item 1, of this Form 10-Q.