W&T Offshore, Inc.

Ladies and gentlemen, thank you for standing by. Welcome to the W&T Offshore Third Quarter 2021 conference call. During today's call, all parties will be in listen-only mode. Following the company's prepared comments, the call will be open for questions and answers. During the question-and-answer session, we ask you that you limit yourself to one and a follow-up. You can always rejoin the queue. The conference is being recorded, and a replay will be made available on the company's website following the call. I'd like to turn the call over to Al Petrie, Investor Relations Coordinator.

Al Petrie Thank you, Nick. And on behalf of the management team, I would like to welcome all of you to today's conference call to review W&T Offshore's third quarter 2021 financial and operational results. Before we begin, I'd like to remind you that our comments may include forward-looking statements. It should be noted that a variety of factors could cause W&T's actual results to differ materially from the anticipated results or expectations expressed in these forward-looking statements. Today's call may also contain certain non-GAAP financial measures. Please refer to the third quarter 2021 earnings release that we issued yesterday for disclosures on forward-looking statements and reconciliations of non-GAAP measures. Before turning the call to Tracy, I'd like to introduce you to Brent Collins, who recently joined W&T as internal director of IR and is on the call with us this morning. Many of you know Brent from his prior E&P IR roles. With that, I'd like to turn the call over to Tracy Krohn, our chairman and CEO.

Thanks, Al. Good morning and good day to everyone, and thank you for joining us for our third quarter 2021 conference call. So with me today are Janet Yang, our executive VP and chief financial officer, William Williford, our Executive VP and General Manager, Gulf of Mexico, Steve Schroeder, our Senior VP and Chief Technical Officer, and Stuart Opkircher, our Director of Geosciences, and they're all available to answer questions later on during the call. So despite the issues Hurricane Ida temporarily created for the industry in Gulf of Mexico, W&T delivered strong operational and financial results in the third quarter. The improved commodity price environment and our commitment to expanding margins led to strong adjusted EBITDA of 45.3 million in the third quarter, and we have generated 152.6 million of adjusted EBITDA in the first nine months of 2021. Additionally, we generated 65.1 million in net cash from operating activities and grew our cash position to $257.6 million at September 30th, 2021. Operationally, we're close to having our coated well online, and drilling is proceeding at our high potential exploratory well in Mississippi Canyon. We are considering drilling additional exploratory wells in our 2022 drilling program, which we will announce with our year-end 2021 earnings. So it's encouraging to see commodity prices at these levels. It allows us to benefit from the work we do every day to continuously improve our assets and make sure our operations are as efficient as they can be without sacrificing safety or the environment. We have an outstanding asset base, and we'll continue to focus on operational excellence to make sure we're maximizing the potential of those assets. So to those of you who have known W&T throughout the years and are well aware that accretive acquisitions have been a hallmark of our success, in the last two years alone, we have integrated two strong acquisitions and we're well positioned to build upon that track record. As you may recall, in May, we meaningfully improved our financial flexibility by more efficiently utilizing the collateral value of our MobileBay assets and completed the financial transaction with Munich Re, wherein we transferred 100% of our Mobile Bay area producing assets and related gas treatment facilities to a wholly owned special purpose vehicle in return for the net cash proceeds from a 215 million first lane non-recourse term loan to the SBBs at a very competitive fixed rate interest of 7%. This allowed us to pay off our then existing RBL balance $48 million, and added a lot more cash liquidity to the balance sheet. Importantly, it provided a significant drive-out to pursue more attractive acquisition opportunities. We're actively looking at opportunities that meet our criteria, which include properties with good cash flow, upside that we can achieve with drill bit, and the potential to increase near-term cash flow through workovers, recompletions, and or facility upgrades. We believe that market conditions in the Gulf of Mexico remain very favorable for creative acquisitions and we intend to pursue opportunities that meet our criteria aggressively. Turning to production for the third quarter of 2021, W&T produced 34.8 thousand barrels of oil equipment per day, or 3.2 million barrels of oil equipment, a decrease of 15% compared to 40.9 thousand barrels of oil, excuse me, 40.9 thousand barrels of oil equipment per day in the second quarter of 2021. Liquids comprised 46% of total production in the third quarter of 2021. Production for the quarter was reduced by approximately 5,500 barrels of oil equipment per day due to deferrals related to Hurricane Ida, with approximately 80% of our production temporarily offline at one point due to the storm. The majority of the impacted production was brought back online during September, and the remaining hurricane-impacted production is expected to be online by the end of 2021. I'm pleased to note that the big bend and denser wells that we discussed in our October 18th press release are back online. Looking forward to the fourth quarter of 2021, we're forecasting our production to be higher than the third quarter as we restore production deferred due to Hurricane Ida and have set guidance between 34.8 and 38.5 thousand barrels of oil equivalent. And with that, I'll turn it over to Janet Yang, our CFO.