W&T Offshore, Inc. reported a second-quarter 2024 loss of 5 cents per share (excluding one item). This was wider than the Zacks Consensus Estimate of a 3 cents loss, although better than the year-ago quarter’s reported loss of 8 cents.
Despite an improvement in the bottom line from the previous year, total quarterly revenues of $142.8 million fell short of the Zacks Consensus Estimate of $152 million, marking an increase from $126 million reported in the prior-year quarter.
Lower earnings were attributed to decreased oil-equivalent production and rising operating expenses. However, this was slightly offset by higher average realized prices for oil-equivalent production.
Challenges in Production
In the second quarter, production averaged 34.9 thousand barrels of oil equivalent per day (MBoe/d), down from 37 MBoe/d in the same period of 2023. This decline was below the estimated 37 Mboe/d and was impacted by the shutdown of W&T Offshore’s Mobile Bay processing plant by a third-party operator for maintenance. The company did experience increased production from wells acquired in previous periods.
Oil production saw an increase from the year-ago quarter but missed estimates. Meanwhile, natural gas liquids output decreased from the previous year but exceeded anticipated values. Natural gas production also witnessed a decline compared to the prior-year quarter and was below the estimated amount.
Realized Commodity Prices
In the second quarter, the average realized prices for oil, NGL, and natural gas showed mixed results. While the average realized price for oil was higher than the previous year, it fell slightly below the estimate. NGL prices increased and surpassed estimates, while natural gas prices improved and exceeded expectations. The average realized price for oil-equivalent output also rose from the prior year and outperformed estimates.
Operating Expenses and Cash Flow
Lease operating expenses and general administrative expenses both showed increases compared to the previous year, with varying degrees of deviation from estimates. However, net cash from operations and free cash flow demonstrated growth from the year-ago quarter.
Capital Spending & Balance Sheet
In the reported quarter, W&T Offshore invested in oil and gas resources and equipment. The company’s cash and cash equivalents remained significant, while net long-term debt was reported at a substantial level with a portion due in the short term.
Future Outlook and Guidance
For the upcoming quarters, W&T Offshore provided production guidance within specific ranges. The company anticipates a certain level of production for the rest of 2024. Investors may also consider alternative options within the energy sector, looking at stocks such as Sunoco LP, SM Energy Company, and Baker Hughes Company, each with different Zacks Ranks and strengths.
Each of these companies presents unique opportunities amidst the evolving energy landscape, with distinct qualities contributing to their value propositions.
