W&T Offshore, Inc. Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

Supplemental Guarantor Information (Tables)

Supplemental Guarantor Information (Tables)

9 Months Ended

Sep. 30, 2016

Supplemental Guarantor Information [Abstract]

W&T OFFSHORE, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)

The following condensed consolidating financial information presents the financial condition, results of operations and cash flows of the Parent Company and the Guarantor Subsidiaries, together with consolidating adjustments necessary to present the Company’s results on a consolidated basis. Transfers of property were made from the Parent Company to the Guarantor Subsidiaries. As these transfers were transactions between entities under common control, the prior period financial information has been retrospectively adjusted for comparability purposes, as prescribed under authoritative guidance. None of the adjustments had any effect on the consolidated results for the current or prior periods presented.

Condensed Consolidating Balance Sheet as of September 30, 2016

										Consolidated
	Parent			Guarantor						W&T
	Company			Subsidiaries			Eliminations			Offshore, Inc.
	(In thousands)
Assets
Current assets:
Cash and cash equivalents	$	73,351		$	—		$	—		$	73,351
Receivables:
Oil and natural gas sales		—			36,305			(533	)		35,772
Joint interest and other		17,688			—			—			17,688
Income taxes		99,276			—			(99,276	)		-
Total receivables		116,964			36,305			(99,809	)		53,460
Prepaid expenses and other assets		13,048			3,097			—			16,145
Total current assets		203,363			39,402			(99,809	)		142,956
Property and equipment – at cost:
Oil and natural gas properties and equipment		5,700,543			2,236,795			—			7,937,338
Furniture, fixtures and other		20,898			—			—			20,898
Total property and equipment		5,721,441			2,236,795			—			7,958,236
Less accum. depreciation, depletion and amortization		5,345,682			2,025,995			—			7,371,677
Net property and equipment		375,759			210,800			—			586,559
Deferred income taxes		9,573			2,822			—			12,395
Restricted deposits for asset retirement obligations		26,767			—			—			26,767
Income tax receivables		52,097			—			—			52,097
Other assets		374,421			311,913			(674,511	)		11,823
Total assets	$	1,041,980		$	564,937		$	(774,320	)	$	832,597
Liabilities and Shareholders’ Equity (Deficit)
Current liabilities:
Accounts payable	$	77,088		$	6,221		$	—		$	83,309
Undistributed oil and natural gas proceeds		19,308			1,931			—			21,239
Asset retirement obligations		68,936			21,214			—			90,150
Accrued liabilities		19,669			99,180			(99,276	)		19,573
Long-term debt		8,763			—			—			8,763
Total current liabilities		193,764			128,546			(99,276	)		223,034
Long-term debt		1,014,221			—			—			1,014,221
Asset retirement obligations, less current portion		136,662			119,994			—			256,656
Other liabilities		375,330			—			(358,647	)		16,683
Shareholders’ deficit:
Common stock		1			—			—			1
Additional paid-in capital		537,496			704,885			(704,885	)		537,496
Retained earnings (deficit)		(1,191,327	)		(388,488	)		388,488			(1,191,327	)
Treasury stock, at cost		(24,167	)		—			—			(24,167	)
Total shareholders’ equity (deficit)		(677,997	)		316,397			(316,397	)		(677,997	)
Total liabilities and shareholders’ equity (deficit)	$	1,041,980		$	564,937		$	(774,320	)	$	832,597

Condensed Consolidating Balance Sheet as of December 31, 2015

										Consolidated
	Parent			Guarantor						W&T
	Company			Subsidiaries			Eliminations			Offshore, Inc.
	(In thousands)
Assets
Current assets:
Cash and cash equivalents	$	85,414		$	—		$	—		$	85,414
Receivables:
Oil and natural gas sales		2,742			32,263			—			35,005
Joint interest and other		121,190			—			(99,178	)		22,012
Total receivables		123,932			32,263			(99,178	)		57,017
Prepaid expenses and other assets		25,375			1,504			—			26,879
Total current assets		234,721			33,767			(99,178	)		169,310
Property and equipment – at cost:
Oil and natural gas properties and equipment		5,682,793			2,219,701			—			7,902,494
Furniture, fixtures and other		20,802			—			—			20,802
Total property and equipment		5,703,595			2,219,701			—			7,923,296
Less accum. depreciation, depletion and amortization		5,258,563			1,822,273			(147,589	)		6,933,247
Net property and equipment		445,032			397,428			147,589			990,049
Deferred income taxes		27,251			344			—			27,595
Restricted deposits for asset retirement obligations		15,606			—			—			15,606
Other assets		498,782			266,748			(760,068	)		5,462
Total assets	$	1,221,392		$	698,287		$	(711,657	)	$	1,208,022
Liabilities and Shareholders’ Equity (Deficit)
Current liabilities:
Accounts payable	$	100,282		$	9,515		$	—		$	109,797
Undistributed oil and natural gas proceeds		20,463			976			—			21,439
Asset retirement obligations		63,716			20,619			—			84,335
Accrued liabilities		11,922			99,178			(99,178	)		11,922
Total current liabilities		196,383			130,288			(99,178	)		227,493
Long-term debt		1,196,855			—			—			1,196,855
Asset retirement obligations, less current portion		173,105			120,882			—			293,987
Other liabilities		329,129			—			(312,951	)		16,178
Shareholders’ deficit:
Common stock		1			—			—			1
Additional paid-in capital		423,499			704,885			(704,885	)		423,499
Retained earnings (deficit)		(1,073,413	)		(257,768	)		405,357			(925,824	)
Treasury stock, at cost		(24,167	)		—			—			(24,167	)
Total shareholders’ equity (deficit)		(674,080	)		447,117			(299,528	)		(526,491	)
Total liabilities and shareholders’ equity (deficit)	$	1,221,392		$	698,287		$	(711,657	)	$	1,208,022

Condensed Consolidating Statement of Operations

Condensed Consolidating Statement of Operations for the Three Months Ended September 30, 2016

										Consolidated
	Parent			Guarantor						W&T
	Company			Subsidiaries			Eliminations			Offshore, Inc.
	(In thousands)
Revenues	$	44,585		$	62,818		$	—		$	107,403
Operating costs and expenses:
Lease operating expenses		22,624			14,896			—			37,520
Production taxes		482			—			—			482
Gathering and transportation		2,103			3,058			—			5,161
Depreciation, depletion, amortization and accretion		21,959			29,861			(320	)		51,500
Ceiling test write-down of oil and natural gas properties		28,305			25,317			4,290			57,912
General and administrative expenses		5,417			7,275			—			12,692
Derivative loss		412			—			—			412
Total costs and expenses		81,302			80,407			3,970			165,679
Operating loss		(36,717	)		(17,589	)		(3,970	)		(58,276	)
Loss of affiliates		(16,925	)		—			16,925			—
Interest expense:
Incurred		23,666			27			—			23,693
Capitalized		(48	)		(27	)		—			(75	)
Gain on exchange of debt		123,960			—			—			123,960
Other expense, net		(73	)		—			—			(73	)
Income (loss) before income tax benefit		46,773			(17,589	)		12,955			42,139
Income tax benefit		(3,125	)		(664	)		—			(3,789	)
Net income (loss)	$	49,898		$	(16,925	)	$	12,955		$	45,928

Condensed Consolidating Statement of Operations for the Nine Months Ended September 30, 2016

										Consolidated
	Parent			Guarantor						W&T
	Company			Subsidiaries			Eliminations			Offshore, Inc.
	(In thousands)
Revenues	$	119,011		$	165,762		$	—		$	284,773
Operating costs and expenses:
Lease operating expenses		66,823			51,788			—			118,611
Production taxes		1,378			—			—			1,378
Gathering and transportation		6,125			10,526			—			16,651
Depreciation, depletion and amortization		65,230			99,956			7,540			172,726
Ceiling test write-down of oil and natural gas properties		28,305			110,709			140,049			279,063
General and administrative expenses		19,390			25,980			—			45,370
Derivative loss		2,861			—			—			2,861
Total costs and expenses		190,112			298,959			147,589			636,660
Operating loss		(71,101	)		(133,197	)		(147,589	)		(351,887	)
Loss of affiliates		(130,719	)		—			130,719			—
Interest expense:
Incurred		81,096			184			—			81,280
Capitalized		(336	)		(184	)		—			(520	)
Gain on exchange of debt		123,960			—			—			123,960
Other expense, net		1,209			—			—			1,209
Loss before income tax benefit		(159,829	)		(133,197	)		(16,870	)		(309,896	)
Income tax benefit		(41,915	)		(2,478	)		—			(44,393	)
Net loss	$	(117,914	)	$	(130,719	)	$	(16,870	)	$	(265,503	)

Condensed Consolidating Statement of Operations for the Three Months Ended September 30, 2015

									Consolidated
	Parent			Guarantor					W&T
	Company			Subsidiaries			Eliminations		Offshore, Inc.
	(In thousands)
Revenues	$	71,092		$	55,136		$	—	$	126,228
Operating costs and expenses:
Lease operating expenses		29,721			15,318			—		45,039
Production taxes		889			—			—		889
Gathering and transportation		1,712			1,860			—		3,572
Depreciation, depletion, amortization and accretion		50,960			46,369			—		97,329
Ceiling test write-down of oil and natural gas properties		244,952			196,736					441,688
General and administrative expenses		8,590			7,925			—		16,515
Derivative gain		(10,231	)		—			—		(10,231	)
Total costs and expenses		326,593			268,208			—		594,801
Operating loss		(255,501	)		(213,072	)		—		(468,573	)
Loss of affiliates		(129,061	)		—			129,061		—
Interest expense:
Incurred		27,911			843			—		28,754
Capitalized		(1,360	)		(843	)		—		(2,203	)
Other expense, net		964			—			—		964
Loss before income tax expense (benefit)		(412,077	)		(213,072	)		129,061		(496,088	)
Income tax expense (benefit)		65,491			(84,011	)		—		(18,520	)
Net loss	$	(477,568	)	$	(129,061	)	$	129,061	$	(477,568	)

Condensed Consolidating Statement of Operations for the Nine Months Ended September 30, 2015

									Consolidated
	Parent			Guarantor					W&T
	Company			Subsidiaries			Eliminations		Offshore, Inc.
	(In thousands)
Revenues	$	238,900		$	164,301		$	—	$	403,201
Operating costs and expenses:
Lease operating expenses		97,463			46,037			—		143,500
Production taxes		2,526			—			—		2,526
Gathering and transportation		7,046			6,143			—		13,189
Depreciation, depletion, amortization and accretion		180,334			145,804			—		326,138
Ceiling test write-down of oil and natural gas properties		616,947			337,903					954,850
General and administrative expenses		31,205			25,833			—		57,038
Derivative gain		(9,153	)		—			—		(9,153	)
Total costs and expenses		926,368			561,720			—		1,488,088
Operating loss		(687,468	)		(397,419	)		—		(1,084,887	)
Loss of affiliates		(248,613	)		—			248,613		—
Interest expense:
Incurred		75,465			2,351			—		77,816
Capitalized		(3,659	)		(2,351	)		—		(6,010	)
Other expense, net		2,647			—			—		2,647
Loss before income tax benefit		(1,010,534	)		(397,419	)		248,613		(1,159,340	)
Income tax benefit		(17,422	)		(148,806	)		—		(166,228	)
Net loss	$	(993,112	)	$	(248,613	)	$	248,613	$	(993,112	)

Condensed Consolidating Statement of Cash Flows

Condensed Consolidating Statement of Cash Flows for the Nine Months Ended September 30, 2016

										Consolidated
										W&T
	Parent			Guarantor						Offshore,
	Company			Subsidiaries			Eliminations			Inc.
	(In thousands)
Operating activities:
Net loss	$	(117,914	)	$	(130,719	)	$	(16,870	)	$	(265,503	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation, depletion, amortization and accretion		65,230			99,956			7,540			172,726
Ceiling test write-down of oil and natural gas properties		28,305			110,709			140,049			279,063
Gain on exchange of debt		(123,960	)		—			—			(123,960	)
Debt issuance costs write-off/amortization of debt items		2,135			—			—			2,135
Share-based compensation		7,642			—			—			7,642
Derivative loss		2,861			—			—			2,861
Cash receipts on derivative settlements, net		4,746			—			—			4,746
Deferred income taxes		17,962			(2,478	)		—			15,484
Loss of affiliates		130,719			—			(130,719	)		—
Changes in operating assets and liabilities:
Oil and natural gas receivables		4,335			(4,041	)		—			294
Joint interest and other receivables		4,281			—			—			4,281
Income taxes		(52,392	)		—			—			(52,392	)
Prepaid expenses and other assets		(14,535	)		(46,758	)		45,165			(16,128	)
Asset retirement obligation settlements		(37,925	)		(18,242	)		—			(56,167	)
Accounts payable, accrued liabilities and other		23,584			37,331			(45,165	)		15,750
Net cash provided by (used in) operating activities		(54,926	)		45,758			—			(9,168	)
Investing activities:
Investment in oil and natural gas properties and equipment		(17,473	)		(6,589	)		—			(24,062	)
Changes in operating assets and liabilities associated with investing activities		2,269			(39,669	)		—			(37,400	)
Proceeds from sales of assets		1,000			500			—			1,500
Purchases of furniture, fixtures and other		(96	)		—			—			(96	)
Net cash used in investing activities		(14,300	)		(45,758	)		—			(60,058	)
Financing activities:
Borrowings of long-term debt – revolving bank credit facility		340,000			—			—			340,000
Repayments of long-term debt – revolving bank credit facility		(340,000	)		—			—			(340,000	)
Issuance of 1.5 Lien Term Loan		75,000			—			—			75,000
Debt exchange costs		(17,920	)		—			—			(17,920	)
Other		83			—			—			83
Net cash provided by financing activities		57,163			—			—			57,163
Increase in cash and cash equivalents		(12,063	)		—			—			(12,063	)
Cash and cash equivalents, beginning of period		85,414			—			—			85,414
Cash and cash equivalents, end of period	$	73,351		$	—		$	—		$	73,351

Condensed Consolidating Statement of Cash Flows for the Nine Months Ended September 30, 2015

										Consolidated
										W&T
	Parent			Guarantor						Offshore,
	Company			Subsidiaries			Eliminations			Inc.
	(In thousands)
Operating activities:
Net loss	$	(993,112	)	$	(248,613	)	$	248,613		$	(993,112	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation, depletion, amortization and accretion		180,334			145,804			—			326,138
Ceiling test write-down of oil and natural gas properties		616,947			337,903			—			954,850
Debt issuance costs write-off/ amortization of debt items		2,862			—			—			2,862
Share-based compensation		8,313			—			—			8,313
Derivative gain		(9,153	)		—			—			(9,153	)
Cash receipts on derivative settlements		2,139			—			—			2,139
Deferred income taxes		(50,743	)		(115,515	)		—			(166,258	)
Loss of affiliates		248,613			—			(248,613	)		—
Changes in operating assets and liabilities:
Oil and natural gas receivables		26,022			(2,735	)		—			23,287
Joint interest and other receivables		1,210			—			—			1,210
Income taxes		33,002			(33,291	)		—			(289	)
Prepaid expenses and other assets		(47,057	)		114,888			(51,139	)		16,692
Asset retirement obligations		(22,901	)		(2,614	)		—			(25,515	)
Accounts payable, accrued liabilities and other		(57,851	)		341			51,139			(6,371	)
Net cash provided by (used in) operating activities		(61,375	)		196,168			—			134,793
Investing activities:
Investment in oil and natural gas properties and equipment		(29,930	)		(162,881	)		—			(192,811	)
Changes in operating assets and liabilities associated with investing activities		(30,731	)		(34,732	)		—			(65,463	)
Investment in subsidiary		(1,445	)		—			1,445			—
Purchases of furniture, fixtures and other		(1,185	)		—			—			(1,185	)
Net cash used in investing activities		(63,291	)		(197,613	)		1,445			(259,459	)
Financing activities:
Borrowings of long-term debt – revolving bank credit facility		263,000			—			—			263,000
Repayments of long-term debt – revolving bank credit facility		(445,000	)		—			—			(445,000	)
Issuance of Second Lien Term Loan		297,000			—			—			297,000
Debt issuance costs		(6,591	)		—			—			(6,591	)
Other		54			—			—			54
Investment from parent		—			1,445			(1,445	)		—
Net cash provided by financing activities		108,463			1,445			(1,445	)		108,463
Decrease in cash and cash equivalents		(16,203	)		—			—			(16,203	)
Cash and cash equivalents, beginning of period		23,666			—			—			23,666
Cash and cash equivalents, end of period	$	7,463		$	—		$	—		$	7,463