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W&T Offshore Reports Adjusted Fourth Quarter Earnings Per Share of $0.80 and Full Year 2007 Financial and Operational Results

HOUSTON, Feb. 28 /PRNewswire-FirstCall/ -- W&T Offshore, Inc. (NYSE: WTI) today announces record production and provides financial and operational results for the fourth quarter and full year 2007. Some of the highlights include:

  • Production increased to a record 126.5 Bcfe
  • Revenues increased to a record $1.1 billion and EBITDA and Adjusted EBITDA increased to a record $779 million and $820 million, respectively for the year
  • Fourth quarter 2007 production increased 19% from the third quarter 2007 and full year 2007 production increased 28% over 2006
  • W&T achieved 89% success in its exploration and development drilling program in 2007, including successfully drilling six of seven exploration wells and two of two development wells
  • Adjusted earnings per share for the fourth quarter 2007 was $0.80 versus $0.52 in 2006 and for the full year 2007 was $2.26 versus $2.71 in 2006

Tracy W. Krohn, Chairman and Chief Executive Officer, stated, "Integration and evaluation of the Kerr-McGee properties, our primary objectives in 2007, has resulted in the development of a very robust drilling program for 2008. Additionally, to assure that we would have ample liquidity and the financial flexibility to pursue that drilling program, as well as other attractive opportunities, we converted our short-term bank borrowings to long-term debt.

"Today, we are focused on capitalizing on the tremendous opportunities we created in 2007," continued Mr. Krohn. "We are planning on drilling fifty wells during 2008, which is a record number for W&T. Over half of these wells are on former Kerr-McGee properties, and about two-thirds are from existing platforms or infrastructure. This large number of wells drilled on or near existing infrastructures or platforms will help W&T convert exploration successes to cash flow quickly," Mr. Krohn added. "So far this year, we have five drilling rigs running and recently closed on the acquisition from Apache Corporation of the remaining working interest in the Ship Shoal 349 field "Mahogany" which we did not already own for a purchase price of $116 million. We believe we made the right choices in 2007 to help us achieve our corporate goals of production and reserve growth in 2008 and beyond."

Revenues, Net Income and EPS: Net income for the fourth quarter of 2007 was $49.4 million, or $0.65 per diluted share, on revenues of $339.5 million compared to net income for the same quarter of 2006 of $38.1 million, or $0.50 per diluted share, on revenues of $264.4 million. Net income increased in the fourth quarter 2007, principally due to a higher realized price of $9.88 per thousand cubic feet equivalent ("Mcfe"), versus $7.38 per Mcfe in 2006. Operating income for the fourth quarter of 2007 reflects the impact of a $16.5 million unrealized derivative loss ($11.3 million after-tax), or $0.15 per diluted share, while operating income for the fourth quarter of 2006 includes an unrealized loss of $1.7 million ($1.1 million after-tax), or $0.02 per diluted share. Without the effect of these unrealized derivative losses, net income for the fourth quarter 2007 would have been $60.7 million, or $0.80 per diluted share, and net income for the corresponding quarter of 2006 would have been $39.2 million, or $0.52 per diluted share. See "Non-GAAP Information" later in this release.

Net income for the year ended December 31, 2007 was $144.3 million, or $1.90 per diluted share, or $2.26 per diluted share without the effect of unrealized derivative losses and the loss on extinguishment of debt, on revenues of $1,113.7 million. This compares to net income of $199.1 million or $2.84 per diluted share, or $2.71 per diluted share without the effect of unrealized derivative gains, on revenues of $800.5 million for 2006. Adjusted net income declined in 2007 from 2006, due to higher lease operating expenses ("LOE") and an increase in depreciation, depletion, amortization, and accretion ("DD&A"), partially offset by record commodity prices and higher production volumes.

Cash Flow from Operating activities and Adjusted EBITDA: EBITDA and Adjusted EBITDA are non-GAAP measures and are hereinafter defined in "Non-GAAP Information" later in this press release. Fourth quarter 2007 Adjusted EBITDA was $252.4 million compared to $207.7 million during the prior year's fourth quarter or a 22% increase. Net cash provided by operating activities for 2007 increased 20% to $688.6 million from $571.6 million in 2006. Adjusted EBITDA was $820.0 million for the year ended December 31, 2007, or a 28% increase, when compared to $641.8 million for the prior year period. Cash flow from operating activities and adjusted EBITDA were higher in 2007 due to a full year of production from the properties acquired from Kerr-McGee and a higher realized price on sales of our oil and natural gas production.

Production and Prices: We sold 21.2 billion cubic feet ("Bcf") of natural gas at an average price of $7.28 per thousand cubic feet ("Mcf") in the fourth quarter of 2007. We also sold 2.2 million barrels ("MMBbls") of oil and natural gas liquids at an average price of $84.62 per barrel ("Bbl") during the same time period. On a natural gas equivalent ("Bcfe") basis, we sold 34.3 Bcfe at an average price of $9.88 per Mcfe. For the fourth quarter of 2006 we sold 23.0 Bcf of natural gas at an average price of $6.64 per Mcf and 2.1 MMBbls of oil and natural gas liquids at an average price of $52.13 per Bbl. On a Bcfe basis, we sold 35.8 Bcfe at an average price of $7.38 per Mcfe. Volumes were lower due to the natural production decline even though this was partially offset by an increase from our exploitation efforts.

We sold 76.7 Bcf of natural gas at an average price of $7.20 per Mcf for the year ended December 31, 2007 and 8.3 MMBbls of oil and natural gas liquids at an average price of $67.58 per Bbl during the same time period. On a Mcfe basis, the Company sold 126.5 Bcfe at an average price of $8.80 per Mcfe. For the year 2006, the Company sold 60.4 Bcf of natural gas at an average price of $7.08 per Mcf and 6.5 MMBbls of oil and natural gas liquids at an average price of $57.70 per Bbl. On a Mcfe basis, the Company sold 99.2 Bcfe at an average price of $8.07 per Mcfe for the same period in 2006. Our 2007 volumes are a new production record.

Lease Operating Expenses: LOE for the fourth quarter of 2007 increased to $65.6 million, or $1.91 per Mcfe, from $45.3 million, or $1.26 per Mcfe, in the fourth quarter of 2006. LOE for the year ended December 31, 2007 was $234.8 million, or $1.86 per Mcfe, compared to $114.0 million, or $1.15 per Mcfe, in 2006. The increases in quarterly and year-to-date LOE are primarily attributable to higher operating costs, hurricane remediation not covered by insurance, workover expenditures and an increase in insurance premiums as a result of hurricanes Katrina and Rita in 2005.

Depreciation, depletion, amortization and accretion: DD&A increased to $159.6 million, or $4.65 per Mcfe, in the fourth quarter of 2007 from $135.7 million, or $3.79 per Mcfe, in the same period of 2006. DD&A for the year ended 2007 was $532.9 million, or $4.21 per Mcfe, compared to DD&A of $337.6 million, or $3.40 per Mcfe, for the same period in 2006. DD&A increased due to capital expenditures, increased future development costs, higher estimated asset retirement obligations, increased volumes produced in 2007 and a 13% reduction in proved reserves for the year ended December 31, 2007.

Capital Expenditures and Operations Update: For the year ended December 31, 2007, capital expenditures were $361 million, including $171 million for development activities, $129 million for exploration, $40 million for seismic and $21 million for other capital items. This compares to capital expenditures in 2006 of $589 million.

Drilling Highlights: In the fourth quarter of 2007, the Company participated in the drilling of four exploration wells. One of the wells was in deepwater and three were on the conventional shelf.


    Successful Wells:

    Field Name/Well             Category             Working Interest %
    Green Canyon 82 #4       Exploration/Deepwater          100%
    Ship Shoal 300 A-1ST     Exploration/Shelf               76%
    Ship Shoal 300 A-3ST     Exploration/Shelf               76%


    Non-commercial Wells:

    Field Name/Well             Category             Working Interest %
    Main Pass 162 A-3        Exploration/Shelf               67%


    After the Close of the Quarter
    Successful Wells:

    Field Name/Well             Category             Working Interest %
    South Timbalier 217 A-3  Exploration/Shelf               50%
    Ship Shoal 315 A-3ST     Exploration/Shelf              100%
    Ship Shoal 300 A-2ST     Exploration/Shelf              100%
    Ship Shoal 314 A-4ST     Exploration/Shelf              100%

Reserves: In 2007, W&T replaced 24% of its production through the drill- bit including extensions and revisions. As of December 31, 2007, total proved reserves were 638.8 Bcfe compared to proved reserves of 735.2 Bcfe as of December 31, 2006. Year-end 2007 proved reserves are comprised of 52% natural gas and 48% oil and natural gas liquids. The present value of our total proved reserves discounted at 10%, including estimated asset retirement obligations discounted to present value based on a 10% annual discount rate, and without deducting any future income taxes, is $3.1 billion based on year-end prices of $6.88 per Mcf of natural gas and $87.22 per Bbl of oil and natural gas liquids adjusted for basis differentials. The Company's estimate of proved reserves is based on a reserve report prepared by Netherland, Sewell & Associates, Inc., the Company's independent petroleum consultant.

    The Company's proved reserves are summarized in the table below.


                                       As of December 31, 2007
                            Oil      Gas     Total    % of Total    PV-10 (1)
    Classification of    (MMBbls)   (Bcf)   (Bcfe)      Proved   (In millions)
     Reserves

    Proved developed
     producing             13.5     143.5    224.1        35%        $964.2
    Proved developed
     non-producing         13.2      91.8    171.2        27%       1,001.8
     Total proved
      developed            26.7     235.3    395.3        62%       1,966.0
    Proved undeveloped     24.3      97.5    243.5        38%       1,089.3
     Total proved          51.0     332.8    638.8       100%      $3,055.3


    (1) The PV-10 value is a non-GAAP measure and is hereinafter defined in
        the "Non-GAAP Information" later in this press release


    2007 Reserve Reconciliation:
                                                              Total Oil and
                                Oil and Liquids   Natural Gas   Natural Gas
                                    (MBbls)         (MMcf)      (MMcfe) (1)
    Proved reserves as of
     December 31, 2006               55,659         401,237       735,189
    Revisions of previous
     estimates (2)                      579         (22,176)      (18,702)
    Discoveries and extensions (3)    2,910          30,979        48,441
    Purchases (sales) of minerals
     in place                           150            (494)          404
    Production                       (8,301)        (76,727)     (126,533)
    Proved reserves as of
     December 31, 2007               50,997         332,819       638,799


    (1) One million cubic feet equivalent (MMcfe) is determined using the
        ratio of six Mcf of natural gas to one Bbl of crude oil, condensate or
        natural gas liquids (totals may not add due to rounding).
    (2) Revisions of previous estimates result from changes in commodity
        prices and changes in the performance of our properties.  Positive
        revisions due to price changes were 19.8 Bcfe and negative revisions
        due to performance were 38.5 Bcfe.
    (3) Approximately 68% of these volumes are attributable to extensions and
        discoveries resulting from five of six successful exploratory wells in
        2007 and the deepening of the previously drilled No. 3 well at Green
        Canyon 82 "Healey."  Approximately 37% of the oil and natural gas
        equivalent volumes of such extensions and discoveries were
        attributable to four new exploratory wells on the conventional shelf,
        4% of such volumes were attributable to one new exploratory well on
        the deep shelf and 27% of such volumes were attributable to the Green
        Canyon 82 No. 3 well.

Outlook: The guidance for first quarter and full year 2008 represents the Company's best estimate of likely future results, and is affected by the factors described below in "Forward-Looking Statements."

Guidance for the first quarter and full year 2008 is shown in the table below.

    2008 Production and Cost Guidance:


    Estimated Production         First Quarter 2008         Full-Year 2008
    Crude oil (MMBbls)               2.0 - 2.1                 7.4 - 9.4
    Natural gas (Bcf)               17.5 - 18.4               65.9 - 83.8
    Total (Bcfe)                    29.2 - 30.7              110.0 - 140.0

    Operating Expenses ($ in     First Quarter 2008         Full-Year 2008
    millions, except as noted)
    Lease operating expenses         $50 - $60               $204 - $243
    Gathering, transportation
     & production taxes               $7 - $8                 $27 - $33
    General and administrative       $11 - $13                $45 - $52
    Income tax rate, % deferred       34%, 50%                 34%, 60%


Conference Call Information: W&T will hold a conference call to discuss financial and operational results on Thursday, February 28, 2008 at 10:30 a.m. Eastern Time / 9:30 a.m. Central Time. To participate, dial (303) 275-2170 a few minutes before the call begins. The call will also be broadcast live over the Internet from the Company's website at www.wtoffshore.com. A replay of the conference call will be available approximately two hours after the end of the call until Thursday, March 6, 2008, and may be accessed by calling (303) 590-3000 and using the pass code 11109032.

About W&T Offshore

Founded in 1983, W&T Offshore is an independent oil and natural gas company focused primarily in the Gulf of Mexico, including exploration in the deepwater and deep shelf regions, where it has developed significant technical expertise. W&T has grown through acquisition, exploitation and exploration and now holds working interests in over 200 fields in federal and state waters and a majority of its daily production is derived from wells it operates. For more information on W&T Offshore, please visit its Web site at www.wtoffshore.com

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements reflect our current views with respect to future events, based on what we believe are reasonable assumptions. No assurance can be given, however, that these events will occur. These statements are subject to risks and uncertainties that could cause actual results to differ materially including, among other things, market conditions, oil and gas price volatility, uncertainties inherent in oil and gas production operations and estimating reserves, unexpected future capital expenditures, competition, the success of our risk management activities, governmental regulations, uncertainties and other factors discussed in our Annual Report on 10-K for the year ended December 31, 2006 (www.sec.gov).

Contacts: Manuel Mondragon, Vice President of Finance investorrelations@wtoffshore.com 713-297-8024

Ken Dennard / ksdennard@drg-e.com Lisa Elliott / lelliott@drg-e.com DRG&E / 713-529-6600


                     W&T OFFSHORE, INC. AND SUBSIDIARIES
                 Condensed Consolidated Statements of Income
                                 (Unaudited)

                                 Three Months Ended          Year Ended
                                    December 31,             December 31,
                                 2007        2006        2007          2006
                                   (In thousands, except per share data)

    Revenues                  $339,456    $264,384    $1,113,749     $800,466

    Operating costs and expenses:
     Lease operating
      expenses (1)              65,604      45,289       234,758      113,993
     Gathering, transportation
      costs and production
      taxes                      6,821       6,003        21,447       17,697
     Depreciation, depletion
      and amortization         154,022     131,079       510,903      325,131
     Asset retirement
      obligation accretion       5,530       4,656        22,007       12,496
     General and administrative
      expenses (1)               9,613       9,614        38,853       37,778
     Derivative loss (gain)     21,450      (2,451)       36,532      (24,244)
      Total costs and
       expenses                263,040     194,190       864,500      482,851
      Operating income          76,416      70,194       249,249      317,615
    Interest expense:
     Incurred                   14,414      19,904        62,188       30,418
     Capitalized                (5,983)     (9,100)      (25,100)     (13,238)
    Loss on extinguishment
     of debt                         -           -         2,806            -
    Other income                 3,896         414         6,404        5,919
     Income before income
      taxes                     71,881      59,804       215,759      306,354
    Income taxes                22,471      21,697        71,459      107,250
     Net income                $49,410     $38,107      $144,300     $199,104

    Earnings per common share:
     Basic                       $0.65       $0.50         $1.90        $2.84
     Diluted                      0.65        0.50          1.90         2.84

    Weighted average shares outstanding:
     Basic                      75,788      75,748        75,787       70,177
     Diluted                    76,012      75,812        75,939       70,217

    Consolidated Cash Flow Information
     Net cash provided by
      operating activities    $215,929    $220,121      $688,597     $571,589
     Capital expenditures-oil
      and gas properties        83,937     201,652       361,235    1,650,747

    Other Financial Information
     Adjusted EBITDA          $252,439    $207,677      $819,990     $641,766


    (1) Certain industry related reimbursements for overhead expenses from
        joint interest owners have been reclassified from lease operating
        expenses to general and administrative expenses in order to better
        match the underlying reimbursement with the actual cost recorded.  The
        2006 amounts have been reclassified to conform with the 2007
        presentation.  The effect of these reclassifications had no impact on
        operating income or net income.


                     W&T OFFSHORE, INC. AND SUBSIDIARIES
                           Condensed Operating Data
                                 (Unaudited)

                                Three Months Ended           Year Ended
                                    December 31,             December 31,
                                  2007       2006         2007         2006
    Net sales:
     Natural gas (MMcf)          21,229     22,957       76,727       60,447
     Oil (MBbls)                  2,185      2,149        8,301        6,456
     Total natural gas and
      oil (MMcfe) (1)            34,340     35,848      126,533       99,181

    Average daily equivalent
     sales (MMcfe/d)              373.3      389.7        346.7        271.7

    Average realized sales prices (Unhedged):
     Natural gas ($/Mcf)          $7.28      $6.64        $7.20        $7.08
     Oil ($/Bbl)                  84.62      52.13        67.58        57.70
     Natural gas equivalent
      ($/Mcfe)                     9.88       7.38         8.80         8.07

    Average realized sales prices (Hedged): (2)
     Natural gas ($/Mcf)          $7.31      $6.72        $7.28        $7.23
     Oil ($/Bbl)                  82.04      53.24        67.01        57.97
     Natural gas equivalent
      ($/Mcfe)                     9.74       7.49         8.81         8.18

    Average per Mcfe ($/Mcfe):
     Lease operating expenses (3) $1.91      $1.26        $1.86        $1.15
     Gathering and transportation
      costs and production taxes   0.20       0.17         0.17         0.18
     Depreciation, depletion,
      amortization and accretion   4.65       3.79         4.21         3.40
     General and administrative
      expenses (3)                 0.28       0.27         0.31         0.38
     Net cash provided by
      operating activities         6.29       6.14         5.44         5.76
     Adjusted EBITDA               7.35       5.79         6.48         6.47

    (1) One billion cubic feet equivalent (Bcfe), one million cubic feet
        equivalent (MMcfe) and one thousand cubic feet equivalent (Mcfe) are
        determined using the ratio of six Mcf of natural gas to one Bbl of
        crude oil, condensate or natural gas liquids (totals may not add due
        to rounding).
    (2) Data for 2007 and 2006 includes the effects of our commodity
        derivative contracts that do not qualify for hedge accounting.
    (3) Certain industry related reimbursements for overhead expenses from
        joint interest owners have been reclassified from lease operating
        expenses to general and administrative expenses in order to better
        match the underlying reimbursement with the actual cost recorded.  The
        2006 amounts have been reclassified to conform with the 2007
        presentation.


                     W&T OFFSHORE, INC. AND SUBSIDIARIES
                    Condensed Consolidated Balance Sheets
                                 (Unaudited)

                                                         December 31,
                                                       2007        2006
                                                     (In thousands, except
                                                         share data)
                  Assets
    Current assets:
     Cash and cash equivalents                      $314,050      $39,235
     Receivables                                     172,128      239,899
     Prepaid expenses and other assets                43,645       49,559
      Total current assets                           529,823      328,693
    Property and equipment - at cost:
     Oil and gas properties and equipment
     (full cost method, of which $278,947
      at December 31, 2007 and $308,231 at
      December 31, 2006 were excluded from
      amortization)                                3,805,208    3,297,153
     Furniture, fixtures and other                    10,267       10,948
      Total property and equipment                 3,815,475    3,308,101
     Less accumulated depreciation, depletion
      and amortization                             1,552,744    1,042,315
      Net property and equipment                   2,262,731    2,265,786
    Restricted deposits for asset retirement
     obligations and other assets                     29,780       15,206
      Total assets                                $2,822,334   $2,609,685

            Liabilities and Shareholders' Equity
    Current liabilities:
     Current maturities of long-term debt             $3,000     $271,380
     Accounts payable                                170,103      247,324
     Undistributed oil and gas proceeds               47,911       46,933
     Asset retirement obligations                     19,749       41,718
     Accrued liabilities                              65,328       28,825
     Current income taxes payable                     12,975            -
     Deferred income taxes - current portion               -        7,896
      Total current liabilities                      319,066      644,076
    Long-term debt, less current maturities
     - net of discount                               651,764      413,617
    Asset retirement obligations, less current
     portion                                         438,932      272,350
    Deferred income taxes                            255,097      232,835
    Other liabilities                                  6,135        3,890
    Commitments and contingencies
    Shareholders' equity:
     Common stock, $0.00001 par value;
      118,330,000 shares authorized; issued
      and outstanding 76,175,159 and
      75,900,082 shares at December 31, 2007 and
      December 31, 2006, respectively                      1            1
     Additional paid-in capital                      365,667      361,855
     Retained earnings                               786,803      681,634
     Accumulated other comprehensive loss             (1,131)        (573)
      Total shareholders' equity                   1,151,340    1,042,917
      Total liabilities and shareholders' equity  $2,822,334   $2,609,685


                     W&T OFFSHORE, INC. AND SUBSIDIARIES
               Condensed Consolidated Statements of Cash Flows
                                 (Unaudited)

                               Three Months Ended         Year Ended
                                  December 31,            December 31,
                               2007       2006         2007         2006
                                           (In thousands)

    Operating activities:
    Net income               $49,410    $38,107      $144,300     $199,104
    Adjustments to reconcile
     net income to net cash
     provided by operating
     activities:
      Depreciation, depletion,
       amortization and
       accretion             159,552    135,735       532,910      337,627
      Amortization of debt
       issuance costs and
       discount on
       indebtedness              632      4,944         6,472        8,182
      Loss on extinguishment
       of debt                     -          -         2,806            -
      Share-based compensation
       related to restricted
       stock issuances           918        367         3,409        2,544
      Unrealized derivative
       loss (gain)            16,471      1,748        37,831      (13,476)
      Deferred income taxes    8,659     40,668         8,751      106,645
      Other                      260        511         1,006          511
      Changes in operating
       assets and
       liabilities           (19,973)    (1,959)      (48,888)     (69,548)
       Net cash provided
        by operating
        activities           215,929    220,121       688,597      571,589

    Investing activities:
    Acquisition of
     Kerr-McGee properties         -          -             -   (1,061,769)
    Investment in oil and
     gas properties and
     equipment, net          (85,738)  (201,652)     (359,376)    (588,978)
    Purchases of furniture,
     fixtures and other, net    (363)     1,829          (711)      (5,156)
       Net cash used in
        investing activities (86,101)  (199,823)     (360,087)  (1,655,903)

    Financing activities:
    Issuance of Senior Notes       -          -       450,000            -
    Borrowings of other
     long-term debt                -    304,000       458,000    1,123,732
    Repayments of long-term
     debt                       (750)  (294,500)     (946,500)    (485,500)
    Proceeds from equity
     offering, net of costs        -          -             -      306,979
    Dividends to shareholders (2,287)    (2,278)       (9,137)      (8,225)
    Debt issuance costs and
     other                      (548)      (356)       (6,058)      (1,135)
       Net cash provided by
        (used in) financing
        activities            (3,585)     6,866       (53,695)     935,851
       Increase (decrease) in
        cash and cash
        equivalents          126,243     27,164       274,815     (148,463)
    Cash and cash
     equivalents, beginning
     of period               187,807     12,071        39,235      187,698
    Cash and cash
     equivalents, end of
     period                 $314,050    $39,235      $314,050      $39,235


                     W&T OFFSHORE, INC. AND SUBSIDIARIES
                             Non-GAAP Information

Certain financial information included in our financial results are not measures of financial performance recognized by accounting principles generally accepted in the United States, or GAAP. These non-GAAP financial measures are "Adjusted Net Income," "EBITDA," "Adjusted EBITDA," and "PV-10." Our management uses these non-GAAP measures in its analysis of our performance. These disclosures may not be viewed as a substitute for results determined in accordance with GAAP and are not necessarily comparable to non- GAAP performance measures, which may be reported by other companies.

             Reconciliation of Net Income to Adjusted Net Income

"Adjusted Net Income" does not include the unrealized derivative (gain) loss and the loss on extinguishment of debt and associated tax effects. Adjusted Net Income is presented because the timing and amount of these items cannot be reasonably estimated and affect the comparability of operating results from period to period, and current periods to prior periods.



                               Three Months Ended          Year Ended
                                  December 31,            December 31,
                               2007          2006      2007         2006
                               (In thousands, except per share amounts)
                                              (Unaudited)

    Net Income               $49,410       $38,107   $144,300    $199,104
    Loss on extinguishment
     of debt                       -             -      2,806           -
    Unrealized derivative
     loss (gain)              16,471         1,748     37,831     (13,476)
    Income tax adjustment
     for above items          (5,149)         (611)   (13,459)      4,717
    Adjusted net income      $60,732       $39,243   $171,478    $190,345

    Adjusted earnings per
     share-diluted             $0.80         $0.52      $2.26       $2.71



               Reconciliation of Net Income to Adjusted EBITDA

We define EBITDA as net income plus income tax expense, net interest expense (income), and depreciation, depletion, amortization and accretion. We believe the presentation of EBITDA and Adjusted EBITDA provide useful information regarding our ability to service debt and to fund capital expenditures and help our investors understand our operating performance and make it easier to compare our results with those of other companies that have different financing, capital and tax structures. Adjusted EBITDA excludes the loss on extinguishment of debt and the unrealized gain or loss related to our open derivative contracts. Although not prescribed under generally accepted accounting principles, we believe the presentation of EBITDA and Adjusted EBITDA are relevant and useful because they help our investors understand our operating performance and make it easier to compare our results with those of other companies that have different financing, capital and tax structures. EBITDA and Adjusted EBITDA should not be considered in isolation from or as a substitute for net income, as an indication of operating performance or cash flows from operating activities or as a measure of liquidity. EBITDA and Adjusted EBITDA, as we calculate them, may not be comparable to EBITDA and Adjusted EBITDA measures reported by other companies. In addition, EBITDA and Adjusted EBITDA do not represent funds available for discretionary use.

The following table presents a reconciliation of our consolidated net income to consolidated EBITDA and Adjusted EBITDA.



                             Three Months Ended           Year Ended
                                 December 31,             December 31,
                             2007         2006         2007        2006
                                           (In thousands)
                                             (Unaudited)

    Net Income             $49,410      $38,107      $144,300    $199,104
    Income taxes            22,471       21,697        71,459     107,250
    Net interest expense     4,535       10,390        30,684      11,261
    Depreciation, depletion,
     amortization and
     accretion             159,552      135,735       532,910     337,627
    EBITDA                 235,968      205,929       779,353     655,242

    Adjustments:
    Loss on extinguishment
     of debt                     -            -         2,806           -
    Unrealized derivative
     loss (gain)            16,471        1,748        37,831     (13,476)
    Adjusted EBITDA       $252,439     $207,677      $819,990    $641,766

Reconciliation of PV-10 to Standardized Measure of Discounted Future Net Cash
                                    Flows

The PV-10, as calculated by our independent petroleum consultant, has been adjusted by the Company to include estimated asset retirement obligations discounted to their present values based on a 10% annual discount rate and using the same estimated useful lives as those used in our calculation of asset retirement obligations under Statement of Financial Accounting Standards No. 143, Accounting for Asset Retirement Obligations. PV-10 is a non-GAAP financial measure; therefore, the following table reconciles our calculation of PV-10 to the standardized measure of discounted future net cash flows, which is the most directly comparable GAAP financial measure. Management believes that the presentation of the non-GAAP financial measure of PV-10 provides useful information to investors because it is widely used by professional analysts and sophisticated investors in evaluating oil and natural gas companies. Management believes that PV-10 is relevant and useful for evaluating the relative monetary significance of oil and natural gas properties. Further, professional analysts and sophisticated investors may utilize the measure as a basis for comparison of the relative size and value of our reserves to other companies' reserves. Management also uses this pre- tax measure when assessing the potential return on investment related to oil and natural gas properties and in evaluating acquisition opportunities. Because there are many unique factors that can impact an individual company when estimating the amount of future income taxes to be paid, we believe the use of a pre-tax measure is valuable for evaluating us. PV-10 is not a measure of financial or operating performance under GAAP, nor is it intended to represent the current market value of our estimated oil and natural gas reserves. PV-10 should not be considered in isolation or as a substitute for the standardized measure of discounted future net cash flows as defined under GAAP.

The following table represents a reconciliation of our PV-10 to Standard Measure of discounted future net cash flows.


                                                        At
                                                    December 31,
                                                       2007
                                                    (Unaudited)
                                                   (In millions)
    Present value of estimated future net
     revenues (PV-10)                                $3,055.3
    Future income taxes, discounted at 10%             (943.0)
    Standardized measure of discounted future
     net cash flows                                  $2,112.3

SOURCE W&T Offshore, Inc. 02/28/2008 CONTACT: Manuel Mondragon, Vice President of Finance of W&T Offshore Inc.+1-713-297-8024, investorrelations@wtoffshore.comor Ken Dennard, ksdennard@drg-e.com, or Lisa Elliott, lelliott@drg-e.com, both of DRG&E +1-713-529-6600, for W&T Offshore, Inc. Web site: http://www.wtoffshore.com (WTI)