Business Context and Reporting Period
Company: W&T Offshore, Inc.
Filing Type: Form 8-K (Current Report)
Date of Report: June 26, 2019
Event: Entry into a Material Definitive Agreement (Purchase and Sale Agreement) with ExxonMobil Corporation and subsidiaries.
Key Financial Metrics and Transaction Details
- Purchase Price: $200 million (subject to customary closing adjustments and an effective date of January 1, 2019).
- Escrow Deposit: $10.0 million deposited by the Company.
- Reserves Acquired: Approximately 74 million barrels of oil equivalents (BOE).
- Reserve Composition: 22% liquids; 99% proved developed producing.
- Assets: Working interests in nine offshore producing fields in the Gulf of Mexico (offshore Alabama) and an onshore treating facility.
- Funding Source: Cash on hand and borrowings under the revolving loan facility.
Material Changes and Transaction Status
The Company has entered into a definitive agreement to acquire assets immediately adjacent to its existing properties. The transaction represents a significant expansion of proved reserves. The closing is anticipated in August 2019, subject to customary conditions. The agreement includes a termination right for both parties if the acquisition is not completed by February 28, 2020, unless extended by mutual agreement.
Outlook, Risks, and Management Commentary
- Timing Risk: Closing is expected in August 2019 but is contingent on satisfying customary closing conditions.
- Termination Risk: The deal may be terminated if not closed by February 28, 2020.
- Financial Impact: The purchase price is subject to adjustments based on the effective date of January 1, 2019.
- Disclosure Note: Information regarding the press release (Item 7.01) is not deemed "filed" under the Exchange Act and is not incorporated by reference into other filings.
Investor Verification Checklist
- Verify the final purchase price after customary closing adjustments.
- Confirm the successful satisfaction of closing conditions by the anticipated August 2019 date.
- Monitor the Company's liquidity and debt levels following the drawdown on the revolving loan facility.
- Review the detailed reserve report to validate the 74 million BOE estimate and the 99% proved developed producing classification.