W&T Offshore Inc. Form 8-K Summary
Business Context and Reporting Period
This Current Report on Form 8-K was filed by W&T Offshore, Inc. on May 11, 2011. The report details the completion of a strategic asset acquisition in the West Texas Permian Basin.
Key Financial Metrics and Transaction Details
- Acquisition Target: Approximately 21,900 gross acres (21,500 net acres) of oil and gas leasehold interests from Opal Resources LLC and Opal Resources Operating Company LLC.
- Purchase Price: Stated price of $366.3 million (subject to adjustments). The amount paid on the closing date was $377.8 million, reflecting preliminary adjustments for the period January 1, 2011, through March 31, 2011.
- Reserves Acquired: Approximately 27 million barrel equivalents (164 Bcfe) as of December 31, 2010. Reserves are over 91% oil and natural gas liquids, with approximately 77% classified as proved undeveloped.
- Production: Properties include producing wells with a current output of approximately 2,950 net barrel equivalents per day.
- Capital Expenditures: Estimated between $35 million and $40 million for planned development activities for the balance of 2011.
- Funding: Transaction funded via cash on hand and borrowings under the Company's revolving credit facility.
Material Changes
The primary material change is the expansion of the Company's asset base in the Permian Basin. The filing does not provide comparative financial metrics (revenue, profit, cash flow, or margins) for the Company as a whole, as this is a transaction-specific report rather than a periodic financial statement.
Outlook, Risks, and Contingencies
- Price Adjustments: The final purchase price remains subject to further adjustments for the period subsequent to March 31, 2011, through the closing date.
- Financial Reporting: Financial statements of the business acquired and pro forma financial information are not included in this filing. They are scheduled to be filed within 71 days of this report.
- Regulatory Disclosure: Information regarding the acquisition announcement is furnished under Regulation FD but is not deemed filed for purposes of Section 18 of the Securities Exchange Act of 1934.
Investor Verification Checklist
- Verify the final purchase price once all post-closing adjustments are calculated.
- Review the upcoming pro forma financial statements (due within 71 days) to assess the impact on leverage and liquidity.
- Confirm the utilization of the revolving credit facility and any resulting changes to debt covenants.
- Monitor the execution of the estimated $35 million to $40 million in capital expenditures for 2011.