Quarterly report pursuant to Section 13 or 15(d)

Supplemental Guarantor Information

v3.7.0.1
Supplemental Guarantor Information
3 Months Ended
Mar. 31, 2017
Supplemental Guarantor Information [Abstract]  
Supplemental Guarantor Information

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

10.  Supplemental Guarantor Information

Our payment obligations under the Credit Agreement, the 1.5 Lien Term Loan, the Second Lien Term Loan, the Second Lien PIK Toggle Notes, the Third Lien PIK Toggle Notes and the Unsecured Senior Notes (see Note 2) are fully and unconditionally guaranteed by certain of our 100%-owned subsidiaries, including Energy VI and W & T Energy VII, LLC (together, the “Guarantor Subsidiaries”).  W & T Energy VII, LLC does not currently have any active operations or contain any assets.  Guarantees will be released under certain circumstances, including:  

 

(1)

in connection with any sale or other disposition of all or substantially all of the assets of a Guarantor Subsidiary (including by way of merger or consolidation) to a person that is not (either before or after giving effect to such transaction) the Company or a Restricted Subsidiary, if the sale or other disposition does not violate the Asset Sale provisions (as such capitalized terms are defined in the applicable indenture);

 

(2)

in connection with any sale or other disposition of the capital stock of such Guarantor Subsidiary to a person that is not (either before or after giving effect to such transaction) the Company or a Restricted Subsidiary of the Company, if the sale or other disposition does not violate the Asset Sale provisions of the indenture and the Guarantor Subsidiary ceases to be a subsidiary of the Company as a result of such sales or disposition;

 

(3)

if such Guarantor Subsidiary is a Restricted Subsidiary and the Company designates such Guarantor Subsidiary as an Unrestricted Subsidiary in accordance with the applicable provisions of certain debt documents;

 

(4)

upon Legal Defeasance or Covenant Defeasance (as such terms are defined in the applicable indenture) or upon satisfaction and discharge of the certain debt documents;

 

(5)

upon the liquidation or dissolution of such Guarantor Subsidiary, provided no event of default has occurred and is continuing; or

 

(6)

at such time as such Guarantor Subsidiary is no longer required to be a Guarantor Subsidiary as described in certain debt documents, provided no event of default has occurred and is continuing.

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.  As to the ceiling test write-down recorded in 2016, the computation is performed for each subsidiary on a stand-alone basis and also for the consolidated Company.  Due to this methodology, consolidating adjustments are required to present the consolidated results appropriately.  

 

Condensed Consolidating Balance Sheet as of March 31, 2017

 

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated

 

 

Parent

 

 

Guarantor

 

 

 

 

 

 

W&T

 

 

Company

 

 

Subsidiaries

 

 

Eliminations

 

 

Offshore, Inc.

 

 

(In thousands)

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

$

126,095

 

 

$

 

 

$

 

 

$

126,095

 

Receivables:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Oil and natural gas sales

 

4,177

 

 

 

40,777

 

 

 

 

 

 

44,954

 

Joint interest

 

16,843

 

 

 

 

 

 

 

 

 

16,843

 

Income taxes

 

116,699

 

 

 

 

 

 

(104,756

)

 

 

11,943

 

Total receivables

 

137,719

 

 

 

40,777

 

 

 

(104,756

)

 

 

73,740

 

Prepaid expenses and other assets

 

14,034

 

 

 

3,101

 

 

 

 

 

 

17,135

 

Total current assets

 

277,848

 

 

 

43,878

 

 

 

(104,756

)

 

 

216,970

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Oil and natural gas properties and other, net

 

367,782

 

 

 

172,017

 

 

 

(1,685

)

 

 

538,114

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Restricted deposits for asset retirement obligations

 

28,224

 

 

 

 

 

 

 

 

 

28,224

 

Income tax receivables

 

59,789

 

 

 

 

 

 

 

 

 

59,789

 

Other assets

 

412,398

 

 

 

386,092

 

 

 

(787,087

)

 

 

11,403

 

Total assets

$

1,146,041

 

 

$

601,987

 

 

$

(893,528

)

 

$

854,500

 

Liabilities and Shareholders’ Equity (Deficit)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accounts payable

$

74,328

 

 

$

7,070

 

 

$

 

 

$

81,398

 

Undistributed oil and natural gas proceeds

 

20,448

 

 

 

1,918

 

 

 

 

 

 

22,366

 

Asset retirement obligations

 

49,788

 

 

 

16,362

 

 

 

 

 

 

66,150

 

Accrued liabilities

 

20,663

 

 

 

104,629

 

 

 

(104,756

)

 

 

20,536

 

Long-term debt

 

8,250

 

 

 

 

 

 

 

 

 

8,250

 

Total current liabilities

 

173,477

 

 

 

129,979

 

 

 

(104,756

)

 

 

198,700

 

Long-term debt:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Principal

 

873,733

 

 

 

 

 

 

 

 

 

873,733

 

Carrying value adjustments

 

137,001

 

 

 

 

 

 

 

 

 

137,001

 

Long term debt, less current portion - carrying value

 

1,010,734

 

 

 

 

 

 

 

 

 

1,010,734

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Asset retirement obligations, less current portion

 

143,434

 

 

 

117,216

 

 

 

 

 

 

260,650

 

Other liabilities

 

449,521

 

 

 

 

 

 

(432,295

)

 

 

17,226

 

Shareholders’ deficit:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common stock

 

1

 

 

 

 

 

 

 

 

 

1

 

Additional paid-in capital

 

541,901

 

 

 

704,885

 

 

 

(704,885

)

 

 

541,901

 

Retained earnings (deficit)

 

(1,148,860

)

 

 

(350,093

)

 

 

348,408

 

 

 

(1,150,545

)

Treasury stock, at cost

 

(24,167

)

 

 

 

 

 

 

 

 

(24,167

)

Total shareholders’ equity (deficit)

 

(631,125

)

 

 

354,792

 

 

 

(356,477

)

 

 

(632,810

)

Total liabilities and shareholders’ equity (deficit)

$

1,146,041

 

 

$

601,987

 

 

$

(893,528

)

 

$

854,500

 

 

Condensed Consolidating Balance Sheet as of December 31, 2016

 

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated

 

 

Parent

 

 

Guarantor

 

 

 

 

 

 

W&T

 

 

Company

 

 

Subsidiaries

 

 

Eliminations

 

 

Offshore, Inc.

 

 

(In thousands)

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

$

70,236

 

 

$

 

 

$

 

 

$

70,236

 

Receivables:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Oil and natural gas sales

 

2,173

 

 

 

40,900

 

 

 

 

 

 

43,073

 

Joint interest

 

21,885

 

 

 

 

 

 

 

 

 

21,885

 

Insurance reimbursement

 

30,100

 

 

 

 

 

 

 

 

 

30,100

 

Income taxes

 

111,215

 

 

 

 

 

 

(99,272

)

 

 

11,943

 

Total receivables

 

165,373

 

 

 

40,900

 

 

 

(99,272

)

 

 

107,001

 

Prepaid expenses and other assets

 

12,448

 

 

 

2,056

 

 

 

 

 

 

14,504

 

Total current assets

 

248,057

 

 

 

42,956

 

 

 

(99,272

)

 

 

191,741

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Oil and natural gas properties and other, net

 

360,966

 

 

 

187,040

 

 

 

(953

)

 

 

547,053

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Restricted deposits for asset retirement obligations

 

27,371

 

 

 

 

 

 

 

 

 

27,371

 

Income tax receivables

 

52,097

 

 

 

 

 

 

 

 

 

52,097

 

Other assets

 

394,931

 

 

 

344,742

 

 

 

(728,209

)

 

 

11,464

 

Total assets

$

1,083,422

 

 

$

574,738

 

 

$

(828,434

)

 

$

829,726

 

Liabilities and Shareholders’ Deficit

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accounts payable

$

74,306

 

 

$

6,733

 

 

$

 

 

$

81,039

 

Undistributed oil and natural gas proceeds

 

24,493

 

 

 

1,761

 

 

 

 

 

 

26,254

 

Asset retirement obligations

 

62,261

 

 

 

16,003

 

 

 

 

 

 

78,264

 

Long-term debt

 

8,272

 

 

 

 

 

 

 

 

 

8,272

 

Accrued liabilities

 

9,293

 

 

 

99,179

 

 

 

(99,272

)

 

 

9,200

 

Total current liabilities

 

178,625

 

 

 

123,676

 

 

 

(99,272

)

 

 

203,029

 

Long-term debt:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Principal

 

873,733

 

 

 

 

 

 

 

 

 

873,733

 

Carrying value adjustments

 

138,722

 

 

 

 

 

 

 

 

 

138,722

 

Long term debt, less current portion - carrying value

 

1,012,455

 

 

 

 

 

 

 

 

 

1,012,455

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Asset retirement obligations, less current portion

 

142,376

 

 

 

113,798

 

 

 

 

 

 

256,174

 

Other liabilities

 

408,050

 

 

 

 

 

 

(390,945

)

 

 

17,105

 

Shareholders’ deficit:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common stock

 

1

 

 

 

 

 

 

 

 

 

1

 

Additional paid-in capital

 

539,973

 

 

 

704,885

 

 

 

(704,885

)

 

 

539,973

 

Retained earnings (deficit)

 

(1,173,891

)

 

 

(367,621

)

 

 

366,668

 

 

 

(1,174,844

)

Treasury stock, at cost

 

(24,167

)

 

 

 

 

 

 

 

 

(24,167

)

Total shareholders’ deficit

 

(658,084

)

 

 

337,264

 

 

 

(338,217

)

 

 

(659,037

)

Total liabilities and shareholders’ deficit

$

1,083,422

 

 

$

574,738

 

 

$

(828,434

)

 

$

829,726

 


 

Condensed Consolidating Statement of Operations for the Three Months Ended March 31, 2017

 

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated

 

 

Parent

 

 

Guarantor

 

 

 

 

 

 

W&T

 

 

Company

 

 

Subsidiaries

 

 

Eliminations

 

 

Offshore, Inc.

 

 

(In thousands)

 

Revenues

$

53,707

 

 

$

70,686

 

 

$

 

 

$

124,393

 

Operating costs and expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Lease operating expenses

 

23,702

 

 

 

16,462

 

 

 

 

 

 

40,164

 

Production taxes

 

515

 

 

 

 

 

 

 

 

 

515

 

Gathering and transportation

 

2,566

 

 

 

3,643

 

 

 

 

 

 

6,209

 

Depreciation, depletion, amortization and accretion

 

19,154

 

 

 

20,105

 

 

 

731

 

 

 

39,990

 

General and administrative expenses

 

5,776

 

 

 

7,498

 

 

 

 

 

 

13,274

 

Derivative gain

 

(3,955

)

 

 

 

 

 

 

 

 

(3,955

)

Total costs and expenses

 

47,758

 

 

 

47,708

 

 

 

731

 

 

 

96,197

 

Operating income

 

5,949

 

 

 

22,978

 

 

 

(731

)

 

 

28,196

 

Earnings of affiliates

 

17,527

 

 

 

 

 

 

(17,527

)

 

 

 

Interest expense incurred

 

11,294

 

 

 

 

 

 

 

 

 

11,294

 

Other expense, net

 

191

 

 

 

 

 

 

 

 

 

191

 

Income before income tax benefit

 

11,991

 

 

 

22,978

 

 

 

(18,258

)

 

 

16,711

 

Income tax benefit

 

(13,039

)

 

 

5,451

 

 

 

 

 

 

(7,588

)

Net income

$

25,030

 

 

$

17,527

 

 

$

(18,258

)

 

$

24,299

 

 

 


 

 

Condensed Consolidating Statement of Operations for the Three Months Ended March 31, 2016

 

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated

 

 

Parent

 

 

Guarantor

 

 

 

 

 

 

W&T

 

 

Company

 

 

Subsidiaries

 

 

Eliminations

 

 

Offshore, Inc.

 

 

(In thousands)

 

Revenues

$

30,512

 

 

$

47,203

 

 

$

 

 

$

77,715

 

Operating costs and expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Lease operating expenses

 

24,945

 

 

 

19,524

 

 

 

 

 

 

44,469

 

Production taxes

 

526

 

 

 

 

 

 

 

 

 

526

 

Gathering and transportation

 

1,553

 

 

 

3,539

 

 

 

 

 

 

5,092

 

Depreciation, depletion, amortization and accretion

 

20,623

 

 

 

38,161

 

 

 

4,949

 

 

 

63,733

 

Ceiling test write-down of oil and natural gas

   properties

 

 

 

 

50,384

 

 

 

66,175

 

 

 

116,559

 

General and administrative expenses

 

6,613

 

 

 

9,830

 

 

 

 

 

 

16,443

 

Derivative gain

 

(2,493

)

 

 

 

 

 

 

 

 

(2,493

)

Total costs and expenses

 

51,767

 

 

 

121,438

 

 

 

71,124

 

 

 

244,329

 

Operating loss

 

(21,255

)

 

 

(74,235

)

 

 

(71,124

)

 

 

(166,614

)

Loss of affiliates

 

(73,029

)

 

 

 

 

 

73,029

 

 

 

 

Interest expense:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Incurred

 

27,695

 

 

 

119

 

 

 

 

 

 

27,814

 

Capitalized

 

(224

)

 

 

(119

)

 

 

 

 

 

(343

)

Other expense, net

 

1,306

 

 

 

 

 

 

 

 

 

1,306

 

Loss before income tax benefit

 

(123,061

)

 

 

(74,235

)

 

 

1,905

 

 

 

(195,391

)

Income tax benefit

 

(3,676

)

 

 

(1,206

)

 

 

 

 

 

(4,882

)

Net loss

$

(119,385

)

 

$

(73,029

)

 

$

1,905

 

 

$

(190,509

)

 


Condensed Consolidating Statement of Cash Flows for the Three Months Ended March 31, 2017

 

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

W&T

 

 

Parent

 

 

Guarantor

 

 

 

 

 

 

Offshore,

 

 

Company

 

 

Subsidiaries

 

 

Eliminations

 

 

Inc.

 

 

(In thousands)

 

Operating activities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

$

25,030

 

 

$

17,527

 

 

$

(18,258

)

 

$

24,299

 

Adjustments to reconcile net income to net cash

  provided by  operating activities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation, depletion, amortization and accretion

 

19,154

 

 

 

20,105

 

 

 

731

 

 

 

39,990

 

Amortization of debt items

 

412

 

 

 

 

 

 

 

 

 

412

 

Share-based compensation

 

1,928

 

 

 

 

 

 

 

 

 

1,928

 

Derivative gain

 

(3,955

)

 

 

 

 

 

 

 

 

(3,955

)

Cash receipts on derivative settlements, net

 

713

 

 

 

 

 

 

 

 

 

713

 

Deferred income taxes

 

105

 

 

 

 

 

 

 

 

 

105

 

Earnings of affiliates

 

(17,527

)

 

 

 

 

 

17,527

 

 

 

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Oil and natural gas receivables

 

(2,004

)

 

 

122

 

 

 

 

 

 

(1,882

)

Joint interest and other receivables

 

35,142

 

 

 

 

 

 

 

 

 

35,142

 

Income taxes

 

(5,451

)

 

 

5,451

 

 

 

 

 

 

 

Prepaid expenses and other assets

 

(6,927

)

 

 

(42,395

)

 

 

41,350

 

 

 

(7,972

)

Asset retirement obligation settlements

 

(12,940

)

 

 

(1,559

)

 

 

 

 

 

(14,499

)

Accounts payable, accrued liabilities and other

 

46,764

 

 

 

1,488

 

 

 

(41,350

)

 

 

6,902

 

Net cash provided by operating activities

 

80,444

 

 

 

739

 

 

 

 

 

 

81,183

 

Investing activities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investment in oil and natural gas properties and equipment

 

(23,593

)

 

 

255

 

 

 

 

 

 

(23,338

)

Changes in operating assets and liabilities associated with

   investing activities

 

2,162

 

 

 

(994

)

 

 

 

 

 

1,168

 

Purchases of furniture, fixtures and other

 

(853

)

 

 

 

 

 

 

 

 

(853

)

Net cash used in investing activities

 

(22,284

)

 

 

(739

)

 

 

 

 

 

(23,023

)

Financing activities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Payment of interest on 1.5 Lien Term Loan

 

(2,056

)

 

 

 

 

 

 

 

 

(2,056

)

Other

 

(245

)

 

 

 

 

 

 

 

 

(245

)

Net cash provided by financing activities

 

(2,301

)

 

 

 

 

 

 

 

 

(2,301

)

Increase in cash and cash equivalents

 

55,859

 

 

 

 

 

 

 

 

 

55,859

 

Cash and cash equivalents, beginning of period

 

70,236

 

 

 

 

 

 

 

 

 

70,236

 

Cash and cash equivalents, end of period

$

126,095

 

 

$

 

 

$

 

 

$

126,095

 

 


 

Condensed Consolidating Statement of Cash Flows for the Three Months Ended March 31, 2016

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

W&T

 

 

Parent

 

 

Guarantor

 

 

 

 

 

 

Offshore,

 

 

Company

 

 

Subsidiaries

 

 

Eliminations

 

 

Inc.

 

 

(In thousands)

 

Operating activities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

$

(119,385

)

 

$

(73,029

)

 

$

1,905

 

 

$

(190,509

)

Adjustments to reconcile net loss to net cash

   provided by operating activities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation, depletion, amortization and accretion

 

20,623

 

 

 

38,161

 

 

 

4,949

 

 

 

63,733

 

Ceiling test write-down of oil and natural gas properties

 

 

 

 

50,384

 

 

 

66,175

 

 

 

116,559

 

Debt issuance costs write-off/ amortization of debt items

 

1,684

 

 

 

 

 

 

 

 

 

1,684

 

Share-based compensation

 

2,536

 

 

 

 

 

 

 

 

 

2,536

 

Derivative gain

 

(2,493

)

 

 

 

 

 

 

 

 

(2,493

)

Cash receipts on derivative settlements

 

4,105

 

 

 

 

 

 

 

 

 

4,105

 

Deferred income taxes

 

(3,676

)

 

 

(1,206

)

 

 

 

 

 

(4,882

)

Loss of affiliates

 

73,029

 

 

 

 

 

 

(73,029

)

 

 

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Oil and natural gas receivables

 

3,606

 

 

 

4,559

 

 

 

 

 

 

8,165

 

Joint interest and other receivables

 

4,991

 

 

 

 

 

 

 

 

 

4,991

 

Income taxes

 

(310

)

 

 

 

 

 

 

 

 

(310

)

Prepaid expenses and other assets

 

3,072

 

 

 

(7,492

)

 

 

5,737

 

 

 

1,317

 

Asset retirement obligations

 

(584

)

 

 

(2,596

)

 

 

 

 

 

(3,180

)

Accounts payable, accrued liabilities and other

 

14,761

 

 

 

18,969

 

 

 

(5,737

)

 

 

27,993

 

Net cash provided by operating activities

 

1,959

 

 

 

27,750

 

 

 

 

 

 

29,709

 

Investing activities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investment in oil and natural gas properties and equipment

 

(3,147

)

 

 

(9,756

)

 

 

 

 

 

(12,903

)

Changes in operating assets and liabilities associated with

   investing activities

 

(2,686

)

 

 

(17,994

)

 

 

 

 

 

(20,680

)

Proceeds from sales of assets and other, net

 

1,000

 

 

 

 

 

 

 

 

 

1,000

 

Net cash used in investing activities

 

(4,833

)

 

 

(27,750

)

 

 

 

 

 

(32,583

)

Financing activities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Borrowings of long-term debt – revolving bank credit facility

 

340,000

 

 

 

 

 

 

 

 

 

340,000

 

Repayments of long-term debt – revolving bank credit facility

 

(52,000

)

 

 

 

 

 

 

 

 

(52,000

)

Other

 

83

 

 

 

 

 

 

 

 

 

83

 

Net cash provided by financing activities

 

288,083

 

 

 

 

 

 

 

 

 

288,083

 

Increase in cash and cash equivalents

 

285,209

 

 

 

 

 

 

 

 

 

285,209

 

Cash and cash equivalents, beginning of period

 

85,414

 

 

 

 

 

 

 

 

 

85,414

 

Cash and cash equivalents, end of period

$

370,623

 

 

$

 

 

$

 

 

$

370,623