W&T Offshore — Second Quarter 2026 Earnings Summary

Financial Performance

• Total revenues reached $162.6 million for the three months ended June 30, 2026, an 8% increase from $150.0 million in Q1 2026 and a 33% increase from $122.4 million in Q2 2025.
• Net income was $12.6 million ($0.08 per diluted share) for Q2 2026, a significant improvement from a net loss of $22.5 million ($0.15 per share) in Q1 2026 and a net loss of $20.9 million ($0.14 per share) in Q2 2025.
• Adjusted Net Income totaled $3.5 million ($0.02 per diluted share) for Q2 2026, compared to an Adjusted Net Loss of $5.1 million ($0.03 per share) in Q1 2026 and an Adjusted Net Loss of $11.8 million ($0.08 per share) in Q2 2025.
• Free Cash Flow increased 50% to $31.4 million in Q2 2026 from $21.0 million in Q1 2026 and 776% from $3.6 million in Q2 2025.
• Adjusted EBITDA was $54.4 million in Q2 2026, flat compared to $54.5 million in Q1 2026, and up 54% from $35.2 million in Q2 2025.
• Lease operating expenses were $71.6 million in Q2 2026, below the lower end of guidance, with costs per Boe at $22.67 (up 12% from Q1 2026 but down 10% from Q2 2025).
• Adjusted General and Administrative Expenses decreased 5% to $16.4 million in Q2 2026 from $17.4 million in Q1 2026.
• Net Debt decreased 9% to $200.9 million as of June 30, 2026, from $220.3 million at March 31, 2026.
• Unrestricted cash and cash equivalents increased 15% to $150.7 million as of June 30, 2026, from $130.9 million at March 31, 2026.
• Total debt was $351.6 million as of June 30, 2026.
• Net Debt to trailing twelve-month Adjusted EBITDA was 1.2 times as of June 30, 2026.

Guidance and Future Outlook

• Full Year 2026 production is guided to 12,227–13,560 MBoe (33.5–37.2 MBoe/d), with Q3 2026 production expected at 3,063–3,385 MBoe (33.3–36.8 MBoe/d).
• Full Year 2026 lease operating expenses are guided to $264.7–$294.7 million; Q3 2026 LOE is guided to $73.0–$81.0 million.
• Full Year 2026 Adjusted G&A expenses are guided to $63.2–$70.2 million; Q3 2026 Adjusted G&A is guided to $17.2–$19.0 million.
• Full Year 2026 capital expenditures are guided to $19.5–$24.5 million, with plugging and abandonment costs guided to $34.0–$42.4 million.
• Full Year 2026 depreciation, depletion, amortization, and accretion is guided to $10.25–$11.35 per Boe.
• Management expects full-year capital expenditures and plugging and abandonment to be towards the higher end of guidance due to project acceleration in the current supportive commodity price environment.
• Q3 2026 lease operating expenses are expected to be higher than Q2 due to approximately $3 million in deferred facility and workover expenses and $2 million in workover projects moving forward from Q4.

Business Segments and Product Lines

• Production averaged 34.7 thousand barrels of oil equivalent per day (MBoe/d) in Q2 2026, at the midpoint of guidance and up 3% from Q2 2025.
• Production mix was 49% liquids in Q2 2026.
• Oil production was 1,213 MBbls in Q2 2026 (down 6% from Q1 2026, down 4% from Q2 2025).
• NGL production was 329 MBbls in Q2 2026 (down 23% from Q1 2026, up 34% from Q2 2025).
• Natural gas production was 9,689 MMcf in Q2 2026 (up 5% from Q1 2026, up 4% from Q2 2025).
• Average realized sales price per Boe was $50.23 in Q2 2026, up 11% from Q1 2026 and up 28% from Q2 2025.
• Average realized oil price was $99.30 per Bbl in Q2 2026 (up 43% from Q1 2026, up 56% from Q2 2025).
• Average realized natural gas price was $3.31 per Mcf in Q2 2026 (down 39% from Q1 2026, down 12% from Q2 2025).
• The company performed three workover projects and one recompletion in Q2 2026 that positively impacted production.
• As of June 30, 2026, the company held working interests in 48 fields (41 federal, 7 state) with approximately 591,000 gross acres under lease.

Market and Competitive Landscape

• Management noted strong realized pricing in the second quarter contributed to financial results.
• The company operates in the Gulf of America with a focus on the outer continental shelf off Louisiana, Texas, Mississippi, and Alabama.
• A majority of the company's daily production is derived from wells it operates.

Risks and Challenges

• Surety lawsuits are ongoing; while results are uncertain, management believes potential claims against sureties could reach hundreds of millions of dollars, potentially statutorily trebled, assuming the company prevails.
• Forward-looking statements are subject to risks including regulatory changes, commodity price volatility, supply chain disruptions, geopolitical risks, and the ability to obtain permits.
• Specific risks include the impact of OPEC+ production levels, pipeline capacity constraints, and the potential for asset impairments from commodity price declines.
• Operational risks include lower-than-expected production, higher decline rates, and the ability to replace reserves through exploration and development.

Management Commentary and Tone

• Tracy W. Krohn, Chairman and CEO, described Q2 2026 as another successful quarter with robust operational and financial results.
• Management highlighted the ability to generate over $50 million in Free Cash Flow in the first half of 2026 while decreasing Net Debt.
• Krohn stated the company is well-positioned to deliver robust results in the second half of 2026 due to consistent production, increasing realized pricing, and cost control.
• Management believes the market may still significantly undervalue the company given its Free Cash Flow generation and dividend commitment.
• Acquisitions remain a key component of the company's success strategy, with a focus on integrating and enhancing acquired assets.

Other Key Points

• The Board of Directors declared a third quarter 2026 dividend of $0.01 per share, payable on August 26, 2026, to shareholders of record on August 19, 2026.
• This marks the 11th consecutive quarterly dividend of $0.01 per share.
• Total available liquidity was $194.1 million as of June 30, 2026, comprising $150.7 million in unrestricted cash and $43.4 million of borrowing availability under the revolving credit facility.
• The company has a borrowing base of $50.0 million on its revolving credit facility with $6.6 million of letters of credit outstanding.
• Gathering, transportation, and production taxes were below guidance in Q2 2026 due to planned maintenance at the Williams Mobile Bay Gas Processing Facility in April.
• General and administrative expenses increased in Q2 2026 compared to Q1 due to higher non-cash share-based compensation costs driven by a higher share price used for valuation.