W&T Offshore Reports First Quarter Adjusted Earnings of $1.10 per Share

HOUSTON, May 6 /PRNewswire-FirstCall/ -- W&T Offshore, Inc. (NYSE: WTI) today provides financial and operational results for the first quarter 2008. Some of the highlights for the first quarter 2008 include:

    --  Revenues increased 45% to a record $356.5 million and Adjusted EBITDA
        increased 66% to a record $279.2 million for the first quarter 2008
    --  Production was 5.1 million barrels of oil equivalent ("BOE") (30.8
        billion cubic feet equivalent "Bcfe"), which exceeded the high end of
        guidance
    --  Oil sales represent 57% of our revenue in first quarter 2008 compared
        to 40% in the same quarter last year
    --  100% success in the exploration drilling program, successfully
        drilling four conventional shelf exploration wells
    --  Drilled four additional exploration wells after the close of the first
        quarter for a 100% success rate
    --  Adjusted earnings per share increased 279% to an all time record
        quarter of $1.10

Tracy W. Krohn, Chairman and Chief Executive Officer, stated, "We are very pleased with our financial and operating results. As our numbers suggest, we are truly benefiting from higher commodity prices and we continue to see the benefits from the Kerr-McGee transaction and the efforts we are making in our operations," continued Mr. Krohn. "So far this year, our exploration drilling program has been 100% successful. We believe that our continued level of high success is further evidence that the Gulf of Mexico continues to be a basin with above average exploration success rates for W&T. Additionally, with our large inventory of high quality prospects and a highly experienced operations team, we believe we can maintain our attractive success rates in this basin. Furthermore, our drilling activity has recently increased further and we have eleven rigs running today and believe we are on track to achieve our corporate goals for 2008."

Revenues, Net Income and EPS: Net income for the first quarter of 2008 was $79.8 million, or $1.05 per diluted share, on revenues of $356.5 million compared to net income for the same quarter of 2007 of $13.0 million, or $0.17 per diluted share, on revenues of $246.5 million. Net income increased in the first quarter 2008 principally due to a higher realized price of $11.57 per thousand cubic feet equivalent ("Mcfe"), versus $7.67 per Mcfe in 2007. Operating income for the first quarter of 2008 also reflects the impact of a $6.2 million unrealized derivative loss ($4.1 million after-tax), or $0.05 per diluted share, while operating income for the first quarter of 2007 included an unrealized loss of $13.9 million ($9.0 million after-tax), or $0.12 per diluted share. Without the effect of these unrealized derivative losses, net income for the first quarter 2008 would have been $83.9 million, or $1.10 per diluted share, and net income for the corresponding quarter of 2007 would have been $22.1 million, or $0.29 per diluted share. See "Non-GAAP Information" later in this press release.

Cash Flow from Operating activities and Adjusted EBITDA: EBITDA and Adjusted EBITDA are non-GAAP measures and are hereinafter defined in "Non-GAAP Information" later in this press release. Net cash provided by operating activities for the three months ended March 31, 2008 increased 65% to $242.4 million from $146.7 million in the first three months of 2007. The increase was associated with higher sales as a result of higher realized prices. First quarter 2008 Adjusted EBITDA was $279.2 million compared to $168.7 million during the prior year's first quarter, or a 66% increase.

Production and Prices: We sold 17.7 billion cubic feet ("Bcf") of natural gas at an average price of $8.70 per thousand cubic feet ("Mcf") in the first quarter of 2008. We also sold 2.2 million barrels ("MMBbls") of oil and natural gas liquids at an average price of $92.52 per barrel ("Bbl") during the same time period. On a natural gas equivalent ("Bcfe") basis, we sold 30.8 Bcfe at an average price of $11.57 per Mcfe. For the first quarter of 2007, we sold 20.4 Bcf of natural gas at an average price of $7.20 per Mcf and 2.0 MMBbls of oil and natural gas liquids at an average price of $51.00 per Bbl. On a Bcfe basis, we sold 32.1 Bcfe at an average price of $7.67 per Mcfe. Volumes in 2008 were lower due to natural reservoir declines, partially offset by an increase from our exploration and development drilling efforts.

Lease Operating Expenses: LOE for the first quarter of 2008 decreased to $49.8 million, or $1.62 per Mcfe, from $63.6 million, or $1.98 per Mcfe, in the first quarter of 2007. The decrease in LOE is primarily due to lower workover expenses, decreased facility expenditures, reduced insurance premiums, and the completion of our hurricane remediation efforts at the end of 2007.

Depreciation, depletion, amortization and accretion: DD&A increased to $145.5 million, or $4.72 per Mcfe, in the first quarter of 2008 from $124.2 million, or $3.87 per Mcfe, in the same period of 2007. DD&A increased due to capital expenditures, increased future development costs and higher estimated asset retirement obligations, partially offset by the addition of reserves from the acquisition of the remaining interest in the Ship Shoal 349/359 "Mahogany" field.

Capital Expenditures and Operations Update: During the first quarter of 2008, the Company was 100% successful in the drilling of four conventional shelf exploration wells. For the quarter ended March 31, 2008, capital expenditures for oil and gas properties of $245.8 million included $116.7 million to acquire the remaining interest in the Ship Shoal 349/359 "Mahogany," $74.4 million for development activities, $41.3 million for exploration, and $13.4 million for other capital items.

Drilling Highlights: In the first quarter of 2008, the Company drilled or participated in the drilling of four conventional shelf exploration wells, all of which were commercially successful.



    Lease Name/Well                    Category           Working Interest %
    Ship Shoal 300 A-2ST           Exploration/Shelf             100%
    Ship Shoal 314 A-4ST           Exploration/Shelf             100%
    Ship Shoal 315 A-3ST           Exploration/Shelf             100%
    South Timbalier 217 A-3        Exploration/Shelf              50%

After the close of the quarter, the Company drilled or participated in the drilling of four commercially successful exploration wells:



    Lease Name/Well                    Category           Working Interest %
    Eugene Island 175 H-5          Exploration/Shelf              25%
    High Island A-376              Exploration/Shelf              30%
    Ship Shoal 224 E-18            Exploration/Deep Shelf         47%
    Ship Shoal 314 A-2ST           Exploration/Shelf              75%


Outlook: Guidance for the second quarter and full year 2008 is shown in the table below, which represents the Company's best estimate of likely future results, and is affected by the factors described below in "Forward-Looking Statements."

    Second Quarter and Full-Year 2008 Production and Cost Guidance:


                                                                    Revised
    Estimated Production       Second Quarter   Prior Full-Year    Full-Year
                                    2008             2008             2008
    Crude oil (MMBbls)           2.2 - 2.4        7.4 - 9.4        8.1 - 9.9
    Natural gas (Bcf)           17.2 - 18.5      65.9 - 83.8      66.2 - 80.6
    Total (MMBoe)                5.1 - 5.5       18.3 - 23.3      19.2 - 23.3
    Total (Bcfe)                30.7 - 32.9     110.0 - 140.0    115.0 - 140.0

    Operating Expenses
     ($ in millions,
      except as noted)         Second Quarter                      Full-Year
                                    2008                              2008

    Lease operating expenses     $55 - $65                        $204 - $243
    Gathering, transportation &
     production taxes             $8 - $10                         $27 - $33
    General and administrative   $12 - $14                         $45 - $52
    Income tax rate, % deferred   34%, 60%                          34%, 60%


Conference Call Information: W&T will hold a conference call to discuss financial and operational results on Tuesday, May 6, 2008 at 11:00 a.m. Eastern Time / 10:00 a.m. Central Time. To participate, dial (303) 205-0033 a few minutes before the call begins. The call will also be broadcast live over the Internet from the Company's Web site at http://www.wtoffshore.com. A replay of the conference call will be available approximately two hours after the end of the call until Tuesday, May 13, 2008, and may be accessed by calling (303) 590-3000 and using the pass code 11112873.

About W&T Offshore

Founded in 1983, W&T Offshore is an independent oil and natural gas company focused primarily in the Gulf of Mexico, including exploration in the deepwater and deep shelf regions, where it has developed significant technical expertise. W&T has grown through acquisition, exploitation and exploration and now holds working interests in over 155 fields in federal and state waters and a majority of its daily production is derived from wells it operates. For more information on W&T Offshore, please visit its Web site at http://www.wtoffshore.com

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements reflect our current views with respect to future events, based on what we believe are reasonable assumptions. No assurance can be given, however, that these events will occur. These statements are subject to risks and uncertainties that could cause actual results to differ materially including, among other things, market conditions, oil and gas price volatility, uncertainties inherent in oil and gas production operations and estimating reserves, unexpected future capital expenditures, competition, the success of our risk management activities, governmental regulations, uncertainties and other factors discussed in our Annual Report on 10-K for the year ended December 31, 2007 (http://www.sec.gov).

     Contacts:
     Manuel Mondragon, Vice President of Finance
     investorrelations@wtoffshore.com
     713-297-8024

     Ken Dennard  / ksdennard@drg-e.com
     Lisa Elliott / lelliott@drg-e.com
     DRG&E / 713-529-6600



                     W&T OFFSHORE, INC. AND SUBSIDIARIES
                 Condensed Consolidated Statements of Income
                                 (Unaudited)

                                                       Three Months Ended
                                                             March 31,
                                                         2008         2007
                                                      (In thousands, except
                                                          per share data)

    Revenues                                           $356,495     $246,539

    Operating costs and expenses:
      Lease operating expenses (1)                       49,822       63,640
      Gathering, transportation costs and production
       taxes                                              8,821        4,257
      Depreciation, depletion and amortization          135,969      118,754
      Asset retirement obligation accretion               9,519        5,447
      General and administrative expenses (1)            12,575       11,907
      Derivative loss                                    12,304       11,971
        Total costs and expenses                        229,010      215,976
        Operating income                                127,485       30,563
    Interest expense:
      Incurred                                           14,378       17,759
      Capitalized                                        (5,673)      (6,828)
    Other income                                          2,440          413
      Income before income taxes                        121,220       20,045
    Income taxes                                         41,414        7,016
      Net income                                        $79,806      $13,029


    Earnings per common share:
      Basic                                               $1.05        $0.17
      Diluted                                              1.05         0.17

    Weighted average shares outstanding:
      Basic                                              75,903       75,787
      Diluted                                            75,999       75,804

    Consolidated Cash Flow Information
      Net cash provided by operating activities        $242,399     $146,661
      Capital expenditures-oil and gas properties       245,834      134,276

    Other Financial Information
      EBITDA                                           $272,973     $154,764
      Adjusted EBITDA                                   279,158      168,652

    (1)  The amounts for 2007 reflect a reclassification of certain industry
         related reimbursements for overhead expenses from joint interest
         owners from lease operating expenses to general and administrative
         expenses in order to better match the underlying reimbursement with
         the actual cost recorded.  The effect of this reclassification had no
         impact on net income.



                     W&T OFFSHORE, INC. AND SUBSIDIARIES
                           Condensed Operating Data
                                 (Unaudited)

                                                          Three Months Ended
                                                                March 31,
                                                           2008          2007
    Net sales:
      Natural gas (MMcf)                                  17,684        20,402
      Oil (MBbls)                                          2,189         1,953
      Total natural gas and oil (MBoe) (1)                 5,136         5,354
      Total natural gas and oil (MMcfe) (2)               30,816        32,122


    Average daily equivalent sales (MBoe/d)                 56.4          59.5
    Average daily equivalent sales (MMcfe/d)               338.6         356.9

    Average realized sales prices (Unhedged):
      Natural gas ($/Mcf)                                  $8.70         $7.20
      Oil ($/Bbl)                                          92.52         51.00
      Barrel of oil equivalent ($/Boe)                     69.40         46.04
      Natural gas equivalent ($/Mcfe)                      11.57          7.67

    Average realized sales prices (Hedged): (3)
      Natural gas ($/Mcf)                                  $8.70         $7.23
      Oil ($/Bbl)                                          89.79         51.68
      Barrel of oil equivalent ($/Boe)                     68.23         46.40
      Natural gas equivalent ($/Mcfe)                      11.37          7.73

    Average per Boe ($/Boe):
    Lease operating expenses (4)                           $9.70        $11.89
    Gathering and transportation costs and production
     taxes                                                  1.72          0.80
    Depreciation, depletion, amortization and accretion    28.33         23.20
    General and administrative expenses (4)                 2.45          2.22
    Net cash provided by operating activities              47.19         27.39
    Adjusted EBITDA                                        54.35         31.50

    Average per Mcfe ($/Mcfe):
      Lease operating expenses (4)                         $1.62         $1.98
      Gathering and transportation costs and production
       taxes                                                0.29          0.13
      Depreciation, depletion, amortization and accretion   4.72          3.87
      General and administrative expenses (4)               0.41          0.37
      Net cash provided by operating activities             7.87          4.57
      Adjusted EBITDA                                       9.06          5.25

    (1)  One million barrels of oil equivalent (MMBoe), one thousand barrels
         of oil equivalent (Mboe) and one barrel of oil equivalent (Boe) are
         determined using the ratio of one Bbl of crude oil, condensate or
         natural gas liquids to six Mcf of natural gas (totals may not add due
         to rounding).
    (2)  One billion cubic feet equivalent (Bcfe), one million cubic feet
         equivalent (MMcfe) and one thousand cubic feet equivalent (Mcfe) are
         determined using the ratio of six Mcf of natural gas to one Bbl of
         crude oil, condensate or natural gas liquids (totals may not add due
         to rounding).
    (3)  Data for 2008 and 2007 includes the effects of our commodity
         derivative contracts that do not qualify for hedge accounting.
    (4)  The amounts for 2007 reflect a reclassification of certain industry
         related reimbursements for overhead expenses from joint interest
         owners from lease operating expenses to general and administrative
         expenses in order to better match the underlying reimbursement with
         the actual cost recorded.  The effect of this reclassification had no
         impact on net income.



                     W&T OFFSHORE, INC. AND SUBSIDIARIES
                    Condensed Consolidated Balance Sheets
                                 (Unaudited)

                                                  March 31,      December 31,
                                                    2008           2007 (1)
                                             (In thousands, except share data)
                       Assets
    Current assets:
      Cash and cash equivalents                   $276,827        $314,050
      Receivables                                  184,002         150,373
      Prepaid expenses and other assets             35,158          43,645
        Total current assets                       495,987         508,068
    Property and equipment - at cost:
      Oil and gas properties and equipment
       (full cost method, of which $253,382 at
       March 31, 2008 and $278,947 at
       December 31, 2007 were excluded from
       amortization)                             4,087,145       3,805,208
      Furniture, fixtures and other                 10,734          10,267
        Total property and equipment             4,097,879       3,815,475
      Less accumulated depreciation, depletion
       and amortization                          1,688,713       1,552,744
        Net property and equipment               2,409,166       2,262,731
    Restricted deposits for asset retirement
    obligations and other assets                    29,650          29,780
        Total assets                            $2,934,803      $2,800,579

          Liabilities and Shareholders' Equity
    Current liabilities:
      Current maturities of long-term debt          $3,000          $3,000
      Accounts payable                             157,564         148,348
      Undistributed oil and gas proceeds            48,404          47,911
      Asset retirement obligations                  30,366          19,749
      Accrued liabilities                           41,007          65,328
      Income taxes                                  18,643          12,975
        Total current liabilities                  298,984         297,311
    Long-term debt, less current maturities
     - net of discount                             651,366         651,764
    Asset retirement obligations, less
     current portion                               462,616         438,932
    Deferred income taxes                          281,935         255,097
    Other liabilities                                7,769           6,135
    Commitments and contingencies
    Shareholders' equity:
      Common stock, $0.00001 par value;
       118,330,000 shares authorized; issued
       and outstanding 76,367,771 and 76,175,159
       shares at March 31, 2008 and
       December 31, 2007, respectively                   1               1
      Additional paid-in capital                   368,889         365,667
      Retained earnings                            864,318         786,803
      Accumulated other comprehensive loss          (1,075)         (1,131)
        Total shareholders' equity               1,232,133       1,151,340
        Total liabilities and shareholders'
         equity                                 $2,934,803      $2,800,579

    (1)  Certain reclassifications have been made to the December 31, 2007
         Balance Sheet to conform to our current reporting practices.



                     W&T OFFSHORE, INC. AND SUBSIDIARIES
               Condensed Consolidated Statements of Cash Flows
                                 (Unaudited)

                                                        Three Months Ended
                                                              March 31,
                                                         2008          2007
                                                           (In thousands)
    Operating activities:
    Net income                                         $79,806        $13,029
    Adjustments to reconcile net income to net
     cash provided by operating activities:
      Depreciation, depletion, amortization and
       accretion                                       145,488        124,201
      Amortization of debt issuance costs and
       discount on indebtedness                            659          3,414
      Share-based compensation related to restricted
       stock issuances                                   1,547            528
      Unrealized derivative loss                         6,185         13,888
      Deferred income taxes                             23,682          8,322
      Other                                                 88             50
      Changes in operating assets and liabilities      (15,056)       (16,771)
        Net cash provided by operating activities      242,399        146,661

    Investing activities:
    Acquisition of property interest                  (116,669)             -
    Investment in oil and gas properties and
     equipment                                        (129,165)      (134,276)
    Purchases of furniture, fixtures and other, net       (672)          (540)
        Net cash used in investing activities         (246,506)      (134,816)

    Financing activities:
    Borrowings of long-term debt                             -        290,000
    Repayments of long-term debt                          (750)      (334,500)
    Dividends to shareholders                          (32,286)        (2,277)
    Other                                                  (80)             -
        Net cash used in financing activities          (33,116)       (46,777)
        Decrease in cash and cash equivalents          (37,223)       (34,932)
    Cash and cash equivalents, beginning of period     314,050         39,235
    Cash and cash equivalents, end of period          $276,827         $4,303



                     W&T OFFSHORE, INC. AND SUBSIDIARIES
                             Non-GAAP Information

Certain financial information included in our financial results are not measures of financial performance recognized by accounting principles generally accepted in the United States, or GAAP. These non-GAAP financial measures are "Adjusted Net Income," "EBITDA," and "Adjusted EBITDA." Our management uses these non-GAAP measures in its analysis of our performance. These disclosures may not be viewed as a substitute for results determined in accordance with GAAP and are not necessarily comparable to non-GAAP performance measures, which may be reported by other companies.

Reconciliation of Net Income to Adjusted Net Income

"Adjusted Net Income" does not include the unrealized derivative (gain) loss and associated tax effects. Adjusted Net Income is presented because the timing and amount of the derivative items cannot be reasonably estimated and affect the comparability of operating results from period to period, and current periods to prior periods.



                                                       Three Months Ended
                                                             March 31,
                                                         2008        2007
                                                   (In thousands, except per
                                                         share amounts)
                                                          (Unaudited)

    Net Income                                        $79,806     $13,029
    Unrealized derivative loss                          6,185      13,888
    Income tax adjustment for above items              (2,113)     (4,861)
    Adjusted net income                               $83,878     $22,056

    Adjusted earnings per share-diluted                 $1.10       $0.29



               Reconciliation of Net Income to Adjusted EBITDA

We define EBITDA as net income plus income tax expense, net interest expense, and depreciation, depletion, amortization and accretion. Adjusted EBITDA excludes the unrealized gain or loss related to our open derivative contracts. Although not prescribed under generally accepted accounting principles, we believe the presentation of EBITDA and Adjusted EBITDA provide useful information regarding our ability to service debt and to fund capital expenditures and help our investors understand our operating performance and make it easier to compare our results with those of other companies that have different financing, capital and tax structures. EBITDA and Adjusted EBITDA should not be considered in isolation from or as a substitute for net income, as an indication of operating performance or cash flows from operating activities or as a measure of liquidity. EBITDA and Adjusted EBITDA, as we calculate them, may not be comparable to EBITDA and Adjusted EBITDA measures reported by other companies. In addition, EBITDA and Adjusted EBITDA do not represent funds available for discretionary use.

The following table presents a reconciliation of our consolidated net income to consolidated EBITDA and Adjusted EBITDA.



                                                        Three Month Ended
                                                            March 31,
                                                        2008        2007
                                                          (In thousands)
                                                            (Unaudited)

    Net Income                                         $79,806      $13,029
    Income taxes                                        41,414        7,016
    Net interest expense                                 6,265       10,518
    Depreciation, depletion, amortization and
     accretion                                         145,488      124,201
    EBITDA                                             272,973      154,764

    Adjustments:
    Unrealized derivative loss                           6,185       13,888
    Adjusted EBITDA                                   $279,158     $168,652

SOURCE W&T Offshore, Inc.