Annual report pursuant to Section 13 and 15(d)

Business Acquisition Pro Forma Information Incremental Items (Detail)

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Business Acquisition Pro Forma Information Incremental Items (Detail) (USD $)
In Thousands, unless otherwise specified
 3 Months Ended 12 Months Ended
Dec. 31, 2013
Sep. 30, 2013
Jun. 30, 2013
Mar. 31, 2013
Dec. 31, 2012
Sep. 30, 2012
Jun. 30, 2012
Mar. 31, 2012
Dec. 31, 2013
Dec. 31, 2012
Dec. 31, 2011
Business Acquisition [Line Items]                      
Revenues $ 244,928 [1] $ 244,555 [1] $ 235,383 [1] $ 259,222 [1] $ 237,146 $ 185,946 $ 215,513 $ 235,886 $ 984,088 $ 874,491 $ 971,047
Lease operating expenses                 270,839 232,260 219,206
Depreciation, depletion, amortization and accretion                 451,529 356,232 328,786
G&A                 81,874 82,017 74,296
Incurred                 85,639 63,268 52,393
Capitalized interest                 10,058 13,274 9,877
Income tax expense                 28,774 47,547 91,517
Callon Properties
                      
Business Acquisition [Line Items]                      
Revenues 5,800                    
Lease operating expenses 1,300                    
Depreciation, depletion, amortization and accretion 2,400                    
Income tax expense 700                    
Callon Properties | Pro Forma
                      
Business Acquisition [Line Items]                      
Revenues                 34,030 [2] 48,559 [2]  
Lease operating expenses                 6,405 [2] 8,525 [2]  
Depreciation, depletion, amortization and accretion                 14,856 [3] 17,492 [3]  
G&A                 (361) [4]    
Incurred                 1,374 [5] 1,648 [5]  
Capitalized interest                 (168) [6] 288 [6]  
Income tax expense                 4,173 [7] 7,212 [7]  
Newfield Properties
                      
Business Acquisition [Line Items]                      
Revenues         29,600            
Lease operating expenses         5,400            
Depreciation, depletion, amortization and accretion         11,900            
Income tax expense         4,300            
Newfield Properties | Pro Forma
                      
Business Acquisition [Line Items]                      
Revenues                   105,705 [8] 216,761 [8]
Lease operating expenses                   33,186 [8] 24,563 [8]
Depreciation, depletion, amortization and accretion                   53,408 [9] 102,713 [9]
G&A                   (553) [10]  
Incurred                   12,060 [11] 15,846 [11]
Capitalized interest                   (643) [12] (868) [12]
Income tax expense                   2,720 [7] 25,856 [7]
Insurance costs                   475 [13] 633 [13]
Opal Properties And Fairway Properties
                      
Business Acquisition [Line Items]                      
Revenues                     64,000
Lease operating expenses                     25,500
Depreciation, depletion, amortization and accretion                     20,500
Income tax expense                     6,300
Opal Properties And Fairway Properties | Pro Forma
                      
Business Acquisition [Line Items]                      
Revenues                     52,383 [14]
Lease operating expenses                     16,368 [14]
Depreciation, depletion, amortization and accretion                     21,836 [15]
G&A                     (1,596) [16]
Incurred                     4,612 [17]
Capitalized interest                     (1,086) [18]
Income tax expense                     $ 4,287 [7]
[1] In January 2014, we identified that we had been receiving an erroneous million British thermal unit (“MMBtu”) conversion factor from a third party that had the effect of understating natural gas production at our Viosca Knoll 783 field (Tahoe).  The incorrect conversion factor had been used on all natural gas production from the field since we acquired it in 2011.  The use of the incorrect conversion factor did not affect revenues, operating cash flows or royalty payments to the federal government but did impact reported natural gas production and the calculation of depletion expense.  We performed an analysis of the information, assessing both quantitative and qualitative factors, and determined that the impact on our net income reported for prior annual periods, as well as the impact to our earnings trend, was not material to 2011 and 2012 results, thus the adjustment was recognized in the fourth quarter of 2013.  The fourth quarter of 2013 reflects a one-time increase in natural gas production volumes of 2.6 Bcf (with no corresponding increase in revenue) by using the correct conversion factor for the annual periods of 2011 and 2012, and the first three quarters of 2013, which increased DD&A by $7.1 million and decreased net income by $4.6 million.
[2] Revenues and direct operating expenses for the Callon Properties were derived from the historical financial records of Callon.
[3] DD&A was estimated using the full-cost method and determined as the incremental DD&A expense due to adding the Callon Properties’ costs, reserves and production into our currently existing full cost pool in order to compute such amounts. The purchase price allocated to unevaluated properties for oil and natural gas interests was excluded from the DD&A expense estimation. ARO was estimated by W&T management.
[4] G&A adjustments related to incremental transaction expenses, which were assumed to be funded from cash on hand, and were adjusted from the 2013 results.
[5] The acquisition was assumed to be funded entirely with borrowed funds. Interest expense was computed using assumed borrowings of $82.4 million, which equates to the cash component of the transaction, and an interest rate of 2.0%, which equates to the rates applied to incremental borrowings on the revolving bank credit facility.
[6] The change to capitalized interest was computed for the addition to the pool of unevaluated properties and the capitalization interest rate was adjusted for the assumed borrowings. Positive amounts represent increases to net expenses. The negative amount represents a decrease to net expenses.
[7] Income tax expense was computed using the 35% federal statutory rate.
[8] Revenues and direct operating expenses for the Newfield Properties were derived from the historical financial records of Newfield.
[9] DD&A was estimated using the full-cost method and determined as the incremental DD&A expense due to adding the Newfield Properties’ costs, reserves and production into our currently existing full cost pool in order to compute such amounts. The purchase price allocated to unevaluated properties for oil and natural gas interests was excluded from the DD&A expense estimation. ARO was estimated by W&T management.
[10] G&A adjustments related to incremental transaction expenses, which were assumed to be funded from cash on hand, and were adjusted from 2012 results.
[11] The acquisition was assumed to be funded entirely with borrowed funds. Interest expense was computed using assumed borrowings of $205.7 million, which equates to the cash component of the transaction, and an interest rate of 7.7%, which equates to the effective yield on net proceeds for the additional senior notes issued shortly after the acquisition closed.
[12] Incremental capitalized interest was computed for the addition to the pool of unevaluated properties and the capitalization interest rate was adjusted for the assumed borrowings. The negative amount represents a decrease to net expenses.
[13] Incremental costs for insurance were estimated from the incremental costs to add the Newfield Properties to W&T’s insurance programs. The direct operating costs for the Newfield Properties described above excluded insurance costs.
[14] Revenues and direct operating expenses for the Opal Properties and the Fairway Properties were derived from the historical records of the sellers up to the respective closing dates.
[15] DD&A was estimated using the full-cost method and determined as the incremental DD&A expense due to adding the Opal Properties and Fairway Properties’ costs, reserves and production into our currently existing full cost pool in order to compute such amounts. The purchase price allocated to unevaluated properties for oil and natural gas interests was excluded from the DD&A expense estimation. ARO were estimated by W&T management.
[16] G&A adjustments related to incremental transaction expenses, which were assumed to be funded from cash on hand, and were adjusted from the 2011 results.
[17] The acquisitions were assumed to be funded entirely with borrowed funds and that borrow capacity would have been available on the revolving bank credit facility due to the increase in reserves. Interest expense was computed using assumed borrowings of $437.2 million, which equates to the cash component of the transactions, and an interest rate ranging from 2.6% to 3.0%, which equates to the rates applied to incremental borrowings on the revolving bank credit facility.
[18] The change to capitalized interest was computed for the addition to the pool of unevaluated properties and the capitalization interest rate was adjusted for the assumed borrowings. The negative amount represents a decrease to net expenses.