W&T Offshore (WTI) FY11 Proved Reserves Increased 44%, Sees FY12 CapEx of $425M, Ex. M&A

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EPS Growth %: -7.0%

Financial Fact:
Lease operating expenses: 56.66M

Today's EPS Names:
TLB, TNP, MENT, More

W&T Offshore, Inc. (NYSE: WTI) reported that year-end 2011 proved reserves increased 44% to 116.9 million barrels of oil equivalent, which represents a reserve replacement ratio of 312% and an increase in PV-10 of proved reserves of 63%. It also announced that its Board of Directors approved the Company's 2012 Capital Budget of $425 million, which is a 37% increase over 2011 and is anticipated to be funded with internally generated cash flow. The Company provided production guidance for 2012 to be in the range of 16.9 to 18.8 million barrels of oil equivalent or 101.1 to 112.9 billion cubic feet equivalent. In regards to 2012 reserve growth, the Company's goal is to increase reserves by at least 18% in 2012.

The Company's year-end 2011 proved reserves increased 44% from year-end 2010 of 80.9 MMBoe as a result of acquisitions, extensions, discoveries and revisions, which represents a reserve replacement ratio of 312%. Estimated total proved reserves at December 31, 2011 consisted of 51.4 million barrels of oil, 720.1 million gallons of natural gas liquids ("NGLs") and 289.7 Bcf of natural gas for a total of 116.9 MMBoe, or 701.1 Bcfe. Proved reserves were 59% oil and NGLs at year-end 2011, compared to 47% at year-end 2010. The present value of future net revenues of our estimated total proved reserves, discounted at 10% (referred to as "PV-10"), was $3.1 billion at December 31, 2011 excluding the effect of estimated asset retirement obligations ("ARO"). PV-10 increased 63% from the PV-10 of our proved reserves at December 31, 2010 of $1.9 billion.

The 2012 capital budget is $425 million, which does not include acquisitions. This budget represents a 37% increase over the 2011 capital budget of $310 million. W&T anticipates fully funding the capital budget with internally generated cash flow. The 2012 Budget currently anticipates the drilling of 75 wells with $167 million (39%) for exploration activities (split 53% offshore and 47% onshore) and $258 million (61%) for development activities (split 63% offshore and 37% onshore).

The Company expects to produce between 16.9 and 18.8 MMBoe or 101.1 and 112.9 Bcfe in 2012, consisting of approximately 47% crude oil and NGLs and 53% natural gas. Our estimated production for 2012 does not included any additional acquisitions but does reflect anticipated downtime from tropical storm activity consistent with our experience in 2011. It should be noted that the Company is currently receiving the Gulf Coast premium on approximately 84% of its oil production. In regards to proved reserves, the Company's goal is at least 18% reserve growth in 2012 from December 31, 2011 as a result of drilling, acquisitions, extensions and revisions.

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