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

Supplemental Guarantor Information

6 Months Ended

Jun. 30, 2012

13. Supplemental Guarantor Information

Our payment obligations under the 8.50% Senior Notes and the Credit Agreement (see Note 6) are fully and unconditionally guaranteed by certain of our wholly-owned subsidiaries, W&T Energy VI, LLC and W&T Energy VII, LLC, which does not have any active operations (together, the “Guarantor Subsidiaries”).

The following unaudited condensed consolidating financial information presents the financial condition, results of operations and cash flows of W&T Offshore, Inc. (when referred to on a stand-alone basis, the “Parent Company”) and the Guarantor Subsidiaries, together with consolidating adjustments necessary to present the Company’s results on a consolidated basis.

Condensed Consolidating Balance Sheet as of June 30, 2012


									Consolidated W&T Offshore, Inc.
	Parent Company			Guarantor Subsidiaries		Eliminations			Consolidated W&T Offshore, Inc.
	(In thousands)
Assets
Current assets:
Cash and cash equivalents	$	8,553		$	—	$	—		$	8,553
Receivables:
Oil and natural gas sales		55,381			17,048		—			72,429
Joint interest and other		21,410			—		—			21,410
Income taxes		114,534			—		(102,501	)		12,033

Total receivables		191,325			17,048		(102,501	)		105,872
Restricted cash and cash equivalents		30,763			—		—			30,763
Prepaid expenses and other assets		54,110			—		—			54,110

Total current assets		284,751			17,048		(102,501	)		199,298
Property and equipment – at cost:
Oil and natural gas properties and equipment		5,788,799			301,266		—			6,090,065
Furniture, fixtures and other		20,169			—		—			20,169

Total property and equipment		5,808,968			301,266		—			6,110,234
Less accumulated depreciation, depletion and amortization		4,330,857			153,639		—			4,484,496

Net property and equipment		1,478,111			147,627		—			1,625,738
Restricted deposits for asset retirement obligations		28,514			—		—			28,514
Deferred income taxes		—			15,526		(15,526	)		—
Other assets		413,514			346,600		(740,846	)		19,268

Total assets	$	2,204,890		$	526,801	$	(858,873	)	$	1,872,818

Liabilities and Shareholders’ Equity
Current liabilities:
Accounts payable	$	85,357		$	858	$	—		$	86,215
Undistributed oil and natural gas proceeds		34,993			255		—			35,248
Asset retirement obligations		99,211			—		—			99,211
Accrued liabilities		15,980			—		—			15,980
Income taxes		—			102,864		(102,501	)		363
Deferred income taxes – current		13,081			—		—			13,081

Total current liabilities		248,622			103,977		(102,501	)		250,098
Long-term debt		680,000			—		—			680,000
Asset retirement obligations, less current portion		221,212			28,578		—			249,790
Deferred income taxes		107,438			—		(15,526	)		91,912
Other liabilities		352,451			—		(346,600	)		5,851
Shareholders’ equity:
Common stock		1			—		—			1
Additional paid-in capital		393,233			231,759		(231,759	)		393,233
Retained earnings		226,100			162,487		(162,487	)		226,100
Treasury stock, at cost		(24,167	)		—		—			(24,167	)

Total shareholders’ equity		595,167			394,246		(394,246	)		595,167

Total liabilities and shareholders’ equity	$	2,204,890		$	526,801	$	(858,873	)	$	1,872,818

Condensed Consolidating Balance Sheet as of December 31, 2011


									Consolidated W&T Offshore, Inc.
	Parent Company			Guarantor Subsidiaries		Eliminations			Consolidated W&T Offshore, Inc.
	(In thousands)
Assets
Current assets:
Cash and cash equivalents	$	4,512		$	—	$	—		$	4,512
Receivables:
Oil and natural gas sales		78,131			20,419		—			98,550
Joint interest and other		25,804			—		—			25,804
Income taxes		74,183			—		(74,183	)		—

Total receivables		178,118			20,419		(74,183	)		124,354
Deferred income taxes		2,007			—		—			2,007
Prepaid expenses and other assets		30,315			—		—			30,315

Total current assets		214,952			20,419		(74,183	)		161,188
Property and equipment – at cost:
Oil and natural gas properties and equipment		5,689,535			269,481		—			5,959,016
Furniture, fixtures and other		19,500			—		—			19,500

Total property and equipment		5,709,035			269,481		—			5,978,516
Less accumulated depreciation, depletion and amortization		4,208,825			111,585		—			4,320,410

Net property and equipment		1,500,210			157,896		—			1,658,106
Restricted deposits for asset retirement obligations		33,462			—		—			33,462
Deferred income taxes		—			17,637		(17,637	)		—
Other assets		372,572			275,181		(631,584	)		16,169

Total assets	$	2,121,196		$	471,133	$	(723,404	)	$	1,868,925

Liabilities and Shareholders’ Equity
Current liabilities:
Accounts payable	$	73,333		$	2,538	$	—		$	75,871
Undistributed oil and natural gas proceeds		33,391			341		—			33,732
Asset retirement obligations		138,185			—		—			138,185
Accrued liabilities		29,705			—		—			29,705
Income taxes		—			84,575		(74,183	)		10,392

Total current liabilities		274,614			87,454		(74,183	)		287,885
Long-term debt		717,000			—		—			717,000
Asset retirement obligations, less current portion		228,419			27,276		—			255,695
Deferred income taxes		76,518			—		(17,637	)		58,881
Other liabilities		280,071			—		(275,181	)		4,890
Shareholders’ equity:
Common stock		1			—		—			1
Additional paid-in capital		386,920			231,759		(231,759	)		386,920
Retained earnings		181,820			124,644		(124,644	)		181,820
Treasury stock, at cost		(24,167	)		—		—			(24,167	)

Total shareholders’ equity		544,574			356,403		(356,403	)		544,574

Total liabilities and shareholders’ equity	$	2,121,196		$	471,133	$	(723,404	)	$	1,868,925

Condensed Consolidating Statement of Income for the Three Months Ended June 30, 2012


									Consolidated W&T Offshore, Inc.
	Parent Company			Guarantor Subsidiaries		Eliminations			Consolidated W&T Offshore, Inc.
	(In thousands)
Revenues	$	155,595		$	59,918	$	—		$	215,513

Operating costs and expenses:
Lease operating expenses		53,490			6,786		—			60,276
Production taxes		1,335			—		—			1,335
Gathering and transportation		3,221			889		—			4,110
Depreciation, depletion, amortization and accretion		63,459			22,482		—			85,941
General and administrative expenses		14,623			—		—			14,623
Derivative gain		(49,872	)		—		—			(49,872	)

Total costs and expenses		86,256			30,157		—			116,413

Operating income		69,339			29,761		—			99,100
Earnings of affiliates		19,328			—		(19,328	)		—
Interest expense:
Incurred		14,706			—		—			14,706
Capitalized		(3,326	)		—		—			(3,326	)

Income before income tax expense		77,287			29,761		(19,328	)		87,720
Income tax expense		23,720			10,433		—			34,153

Net income	$	53,567		$	19,328	$	(19,328	)	$	53,567

Condensed Consolidating Statement of Income for the Six Months Ended June 30, 2012


									Consolidated W&T Offshore, Inc.
	Parent Company			Guarantor Subsidiaries		Eliminations			Consolidated W&T Offshore, Inc.
	(In thousands)
Revenues	$	332,157		$	119,242	$	—		$	451,399

Operating costs and expenses:
Lease operating expenses		103,507			13,431		—			116,938
Production taxes		2,821			—		—			2,821
Gathering and transportation		6,704			1,626		—			8,330
Depreciation, depletion, amortization and accretion		131,082			43,350		—			174,432
General and administrative expenses		41,510			2,592		—			44,102
Derivative gain		(10,238	)		—		—			(10,238	)

Total costs and expenses		275,386			60,999		—			336,385

Operating income		56,771			58,243		—			115,014
Earnings of affiliates		37,844			—		(37,844	)		—
Interest expense:
Incurred		28,612			—		—			28,612
Capitalized		(6,517	)		—		—			(6,517	)

Income before income tax expense		72,520			58,243		(37,844	)		92,919
Income tax expense		15,735			20,399		—			36,134

Net income	$	56,785		$	37,844	$	(37,844	)	$	56,785

Condensed Consolidating Statement of Income for the Three Months Ended June 30, 2011


	Parent Company			Guarantor Subsidiaries		Eliminations			Consolidated W&T Offshore, Inc.
	(In thousands)
Revenues	$	192,527		$	60,395	$	—		$	252,922

Operating costs and expenses:
Lease operating expenses		38,066			10,531		—			48,597
Production taxes		845			—		—			845
Gathering and transportation		3,249			548		—			3,797
Depreciation, depletion and amortization		63,216			20,154		—			83,370
General and administrative expenses		16,892			1,110		—			18,002
Derivative gain		(17,332	)		—		—			(17,332	)

Total costs and expenses		104,936			32,343		—			137,279

Operating income		87,591			28,052		—			115,643
Earnings of affiliates		18,234			—		(18,234	)		—
Interest expense:
Incurred		12,047			—		—			12,047
Capitalized		(2,079	)		—		—			(2,079	)
Loss on extinguishment of debt		20,663			—		—			20,663

Income before income tax expense		75,194			28,052		(18,234	)		85,012
Income tax expense		20,019			9,818		—			29,837

Net income	$	55,175		$	18,234	$	(18,234	)	$	55,175

Condensed Consolidating Statement of Income for the Six Months Ended June 30, 2011


	Parent Company			Guarantor Subsidiaries		Eliminations			Consolidated W&T Offshore, Inc.
	(In thousands)
Revenues	$	332,753		$	131,024	$	—		$	463,777

Operating costs and expenses:
Lease operating expenses		80,147			20,855		—			101,002
Production taxes		1,133			—		—			1,133
Gathering and transportation		6,321			2,029		—			8,350
Depreciation, depletion and amortization		114,627			42,835		—			157,462
General and administrative expenses		33,549			2,582		—			36,131
Derivative loss		6,508			—		—			6,508

Total costs and expenses		242,285			68,301		—			310,586

Operating income		90,468			62,723		—			153,191
Earnings of affiliates		40,770			—		(40,770	)		—
Interest expense:
Incurred		22,176			—		—			22,176
Capitalized		(3,491	)		—		—			(3,491	)
Loss on extinguishment of debt		20,663			—		—			20,663

Income before income tax expense		91,890			62,723		(40,770	)		113,843
Income tax expense		18,066			21,953		—			40,019

Net income	$	73,824		$	40,770	$	(40,770	)	$	73,824

Condensed Consolidating Statement of Cash Flows for the Six Months Ended June 30, 2012


	Parent Company			Guarantor Subsidiaries			Eliminations			Consolidated W&T Offshore, Inc.
	(In thousands)
Operating activities:
Net income	$	56,785		$	37,844		$	(37,844	)	$	56,785
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, depletion, amortization and accretion		131,082			43,350			—			174,432
Amortization of debt issuance costs		1,287			—			—			1,287
Share-based compensation		5,818			—			—			5,818
Derivative gain		(10,238	)		—			—			(10,238	)
Cash payments on derivative settlements		(6,084	)		—			—			(6,084	)
Deferred income taxes		46,010			2,110			—			48,120
Earnings of affiliates		(37,844	)		—			37,844			—
Changes in operating assets and liabilities:
Oil and natural gas receivables		22,750			3,371			—			26,121
Joint interest and other receivables		3,630			—			—			3,630
Insurance receivables		500			—			—			500
Income taxes		(40,351	)		18,289			—			(22,062	)
Prepaid expenses and other assets		(14,110	)		(71,419	)		71,419			(14,110	)
Asset retirement obligations		(29,228	)		—			—			(29,228	)
Accounts payable and accrued liabilities		7,205			(1,766	)		—			5,439
Other liabilities		72,334			—			(71,419	)		915

Net cash provided by operating activities		209,546			31,779			—			241,325

Investing activities:
Investment in oil and natural gas properties and equipment		(155,505	)		(31,779	)		—			(187,284	)
Proceeds from sales of oil and gas properties and equipment		30,453			—			—			30,453
Change in restricted cash		(30,763	)		—			—			(30,763	)
Purchases of furniture, fixtures and other		(668	)		—			—			(668	)

Net cash used in investing activities		(156,483	)		(31,779	)		—			(188,262	)

Financing activities:
Borrowings of long-term debt – revolving bank credit facility		197,000			—			—			197,000
Repayments of long-term debt – revolving bank credit facility		(234,000	)		—			—			(234,000	)
Dividends to shareholders		(11,898	)		—			—			(11,898	)
Other		(124	)		—			—			(124	)

Net cash used in financing activities		(49,022	)		—			—			(49,022	)

Increase in cash and cash equivalents		4,041			—			—			4,041
Cash and cash equivalents, beginning of period		4,512			—			—			4,512

Cash and cash equivalents, end of period	$	8,553		$	—		$	—		$	8,553

Condensed Consolidating Statement of Cash Flows for the Six Months Ended June 30, 2011


	Parent Company			Guarantor Subsidiaries			Eliminations			Consolidated W&T Offshore, Inc.
	(In thousands)
Operating activities:
Net income	$	73,824		$	40,770		$	(40,770	)	$	73,824
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, depletion, amortization and accretion		114,627			42,835			—			157,462
Amortization of debt issuance costs and discount on indebtedness		815			—			—			815
Loss on extinguishment of debt		20,663			—			—			20,663
Share-based compensation		3,662			—			—			3,662
Derivative loss		6,508			—			—			6,508
Cash payments on derivative settlements		(8,322	)		—			—			(8,322	)
Deferred income taxes		42,154			(6,428	)		—			35,726
Earnings of affiliates		(40,770	)		—			40,770			—
Changes in operating assets and liabilities:
Oil and natural gas receivables		(18,779	)		7,173			—			(11,606	)
Joint interest and other receivables		14,107			—			—			14,107
Insurance receivables		12,583			—			—			12,583
Income taxes		(43,339	)		28,382			—			(14,957	)
Prepaid expenses and other assets		(24,650	)		(108,643	)		108,643			(24,650	)
Asset retirement obligations		(29,703	)		—			—			(29,703	)
Accounts payable and accrued liabilities		(4,665	)		(1,717	)		—			(6,382	)
Other liabilities		108,758			—			(108,643	)		115

Net cash provided by operating activities		227,473			2,372			—			229,845

Investing activities:
Acquisition of significant property interest in oil and natural gas properties		(396,976	)		—			—			(396,976	)
Investment in oil and natural gas properties and equipment		(83,429	)		(2,372	)		—			(85,801	)
Purchases of furniture, fixtures and other		(178	)		—			—			(178	)

Net cash used in investing activities		(480,583	)		(2,372	)		—			(482,955	)

Financing activities:
Issuance of 8.5% Senior Notes		600,000			—			—			600,000
Repurchase of 8.25% Senior Notes		(406,150	)		—			—			(406,150	)
Borrowings of long-term debt – revolving bank credit facility		310,000			—			—			310,000
Repayments of long-term debt – revolving bank credit facility		(235,000	)		—			—			(235,000	)
Repurchase premium and debt issuance costs		(29,728	)		—			—			(29,728	)
Dividends to shareholders		(5,957	)		—			—			(5,957	)

Net cash provided by financing activities		233,165			—			—			233,165

Decrease in cash and cash equivalents		(19,945	)		—			—			(19,945	)
Cash and cash equivalents, beginning of period		28,655			—			—			28,655

Cash and cash equivalents, end of period	$	8,710		$	—		$	—		$	8,710