Quarterly report pursuant to Section 13 or 15(d)

Supplemental Guarantor Information

v3.10.0.1
Supplemental Guarantor Information
9 Months Ended
Sep. 30, 2018
Supplemental Guarantor Information [Abstract]  
Supplemental Guarantor Information

13.  Supplemental Guarantor Information

On September 30, 2018, our payment obligations under the Prior Credit Agreement, the 1.5 Lien Term Loan, the Second Lien Term Loan, the Second Lien PIK Toggle Notes, the Third Lien PIK Toggle Notes and the Unsecured Senior Notes (collectively, the “Existing Notes”) were fully and unconditionally guaranteed by certain of our 100%-owned subsidiaries, including the Guarantor Subsidiaries.  W & T Energy VII, LLC does not currently have any active operations or contain any assets.  Subsequent to the 2018 Refinancing Transaction, the New Revolving Credit Agreement and the Senior Second Lien Notes are fully and unconditionally guaranteed by Guarantor Subsidiaries.  Under the indentures governing the Existing Notes and the Senior Second Lien Notes, the guarantees of the Guarantor Subsidiaries can be released under certain circumstances, including:  

 

(1)

in connection with any sale or other disposition of all or substantially all of the assets of a Guarantor Subsidiary (including by way of merger or consolidation) to a person that is not (either before or after giving effect to such transaction) the Company or a Restricted Subsidiary, if the sale or other disposition does not violate the Asset Sale provisions (as such capitalized terms are defined in the New Revolving Credit Agreement and Senior Second Lien Notes);

 

(2)

in connection with any sale or other disposition of the capital stock of such Guarantor Subsidiary to a person that is not (either before or after giving effect to such transaction) the Company or a Restricted Subsidiary of the Company, if the sale or other disposition does not violate the Asset Sale provisions of the New Revolving Credit Agreement and Senior Second Lien Notes and the Guarantor Subsidiary ceases to be a subsidiary of the Company as a result of such sales or disposition;

 

(3)

if such Guarantor Subsidiary is a Restricted Subsidiary and the Company designates such Guarantor Subsidiary as an Unrestricted Subsidiary in accordance with the applicable provisions of the New Revolving Credit Agreement and Senior Second Lien Notes;

 

(4)

upon Legal Defeasance or Covenant Defeasance (as such terms are defined in the applicable indenture) or upon satisfaction and discharge of the New Revolving Credit Agreement and Senior Second Lien Notes;

 

(5)

upon the liquidation or dissolution of such Guarantor Subsidiary, provided no event of default has occurred and is continuing; or

 

(6)

at such time as such Guarantor Subsidiary is no longer required to be a Guarantor Subsidiary as described in the New Revolving Credit Agreement and Senior Second Lien Notes, provided no event of default has occurred and is continuing.

The following condensed consolidating financial information presents the financial condition, results of operations and cash flows of the Parent Company and the Guarantor Subsidiaries, together with consolidating adjustments necessary to present the Company’s results on a consolidated basis.  As a result of the JV Drilling Program, we recorded proportional consolidation adjustments, which are not considered a guarantor asset under our debt agreements and, accordingly, are reported as non-guarantor adjustments in the following tables.  Due to the methodology of recording the ceiling-test write down in prior periods, consolidating adjustments are required to present the consolidated results appropriately.  The 2018 Refinancing Transaction substantially changed our capital structure.  See Note 12, Subsequent Events, for additional information.  

Condensed Consolidating Balance Sheet as of September 30, 2018

 

Parent Company

 

 

Guarantor Subsidiaries

 

 

Non-Guarantor Adjustments

 

 

Eliminations

 

 

Consolidated W&T Offshore, Inc.

 

 

(In thousands)

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

$

339,063

 

 

$

 

 

$

 

 

$

 

 

$

339,063

 

Receivables:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Oil and natural gas sales

 

7,946

 

 

 

40,972

 

 

 

564

 

 

 

 

 

 

49,482

 

Joint interest

 

16,493

 

 

 

 

 

 

 

 

 

 

 

 

16,493

 

Income taxes

 

199,203

 

 

 

 

 

 

 

 

 

(133,963

)

 

 

65,240

 

Total receivables

 

223,642

 

 

 

40,972

 

 

 

564

 

 

 

(133,963

)

 

 

131,215

 

Prepaid expenses and other assets

 

16,707

 

 

 

2,956

 

 

 

36

 

 

 

 

 

 

19,699

 

Total current assets

 

579,412

 

 

 

43,928

 

 

 

600

 

 

 

(133,963

)

 

 

489,977

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Oil and natural gas properties and other, net

 

372,660

 

 

 

111,907

 

 

 

49,476

 

 

 

(11,262

)

 

 

522,781

 

Restricted deposits for asset retirement obligations

 

20,577

 

 

 

 

 

 

 

 

 

 

 

 

20,577

 

Other assets

 

637,886

 

 

 

589,084

 

 

 

(51,316

)

 

 

(1,106,640

)

 

 

69,014

 

Total assets

$

1,610,535

 

 

$

744,919

 

 

$

(1,240

)

 

$

(1,251,865

)

 

$

1,102,349

 

Liabilities and Shareholders’ Equity (Deficit)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accounts payable

$

90,260

 

 

$

7,318

 

 

$

(2,076

)

 

$

 

 

$

95,502

 

Undistributed oil and natural gas proceeds

 

32,806

 

 

 

1,419

 

 

 

 

 

 

 

 

 

34,225

 

Advances from joint interest partners

 

31,012

 

 

 

-

 

 

 

 

 

 

 

 

 

31,012

 

Asset retirement obligations

 

19,479

 

 

 

10,728

 

 

 

 

 

 

 

 

 

30,207

 

Current maturities of long-term debt:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Principal

 

189,829

 

 

 

 

 

 

 

 

 

 

 

 

189,829

 

Carrying value adjustments

 

34,985

 

 

 

 

 

 

 

 

 

 

 

 

34,985

 

Current maturities of long-term debt  -

   carrying value

 

224,814

 

 

 

 

 

 

 

 

 

 

 

 

224,814

 

Accrued liabilities

 

31,076

 

 

 

133,945

 

 

 

 

 

 

(133,963

)

 

 

31,058

 

Total current liabilities

 

429,447

 

 

 

153,410

 

 

 

(2,076

)

 

 

(133,963

)

 

 

446,818

 

Long-term debt:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Principal

 

713,365

 

 

 

 

 

 

 

 

 

 

 

 

713,365

 

Carrying value adjustments

 

45,758

 

 

 

 

 

 

 

 

 

 

 

 

45,758

 

Long term debt, less current portion -

  carrying value

 

759,123

 

 

 

 

 

 

 

 

 

 

 

 

759,123

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Asset retirement obligations, less current portion

 

162,835

 

 

 

120,154

 

 

 

20

 

 

 

 

 

 

283,009

 

Other liabilities

 

708,461

 

 

 

 

 

 

 

 

 

(635,286

)

 

 

73,175

 

Shareholders’ equity (deficit):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common stock

 

1

 

 

 

 

 

 

 

 

 

 

 

 

1

 

Additional paid-in capital

 

549,569

 

 

 

704,885

 

 

 

 

 

 

(704,885

)

 

 

549,569

 

Retained earnings (deficit)

 

(974,734

)

 

 

(233,530

)

 

 

816

 

 

 

222,269

 

 

 

(985,179

)

Treasury stock, at cost

 

(24,167

)

 

 

 

 

 

 

 

 

 

 

 

(24,167

)

Total shareholders’ equity (deficit)

 

(449,331

)

 

 

471,355

 

 

 

816

 

 

 

(482,616

)

 

 

(459,776

)

Total liabilities and shareholders’ equity (deficit)

$

1,610,535

 

 

$

744,919

 

 

$

(1,240

)

 

$

(1,251,865

)

 

$

1,102,349

 

 

Condensed Consolidating Balance Sheet as of December 31, 2017

 

Parent Company

 

 

Guarantor Subsidiaries

 

 

Eliminations

 

 

Consolidated W&T Offshore, Inc.

 

 

(In thousands)

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

$

99,058

 

 

$

 

 

$

 

 

$

99,058

 

Receivables:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Oil and natural gas sales

 

5,665

 

 

 

39,778

 

 

 

 

 

 

45,443

 

Joint interest

 

19,754

 

 

 

 

 

 

 

 

 

19,754

 

Income taxes

 

128,835

 

 

 

 

 

 

(115,829

)

 

 

13,006

 

Total receivables

 

154,254

 

 

 

39,778

 

 

 

(115,829

)

 

 

78,203

 

Prepaid expenses and other assets

 

11,154

 

 

 

2,265

 

 

 

 

 

 

13,419

 

Total current assets

 

264,466

 

 

 

42,043

 

 

 

(115,829

)

 

 

190,680

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Oil and natural gas properties and other, net

 

430,354

 

 

 

152,464

 

 

 

(3,802

)

 

 

579,016

 

Restricted deposits for asset retirement obligations

 

25,394

 

 

 

 

 

 

 

 

 

25,394

 

Income taxes receivable

 

52,097

 

 

 

 

 

 

 

 

 

52,097

 

Other assets

 

505,304

 

 

 

453,306

 

 

 

(898,217

)

 

 

60,393

 

Total assets

$

1,277,615

 

 

$

647,813

 

 

$

(1,017,848

)

 

$

907,580

 

Liabilities and Shareholders’ Deficit

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accounts payable

$

72,705

 

 

$

6,962

 

 

$

 

 

$

79,667

 

Undistributed oil and natural gas proceeds

 

18,762

 

 

 

1,367

 

 

 

 

 

 

20,129

 

Advances from joint interest partners

 

3,998

 

 

 

 

 

 

 

 

 

3,998

 

Asset retirement obligations

 

22,488

 

 

 

1,125

 

 

 

 

 

 

23,613

 

Current maturities of long-term debt  - carrying value

 

22,925

 

 

 

 

 

 

 

 

 

22,925

 

Accrued liabilities

 

18,058

 

 

 

115,701

 

 

 

(115,829

)

 

 

17,930

 

Total current liabilities

 

158,936

 

 

 

125,155

 

 

 

(115,829

)

 

 

168,262

 

Long-term debt:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Principal

 

889,790

 

 

 

 

 

 

 

 

 

889,790

 

Carrying value adjustments

 

79,337

 

 

 

 

 

 

 

 

 

79,337

 

Long term debt, less current portion - carrying value

 

969,127

 

 

 

 

 

 

 

 

 

969,127

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Asset retirement obligations, less current portion

 

152,883

 

 

 

123,950

 

 

 

 

 

 

276,833

 

Other liabilities

 

566,375

 

 

 

 

 

 

(499,509

)

 

 

66,866

 

Shareholders’ equity (deficit):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common stock

 

1

 

 

 

 

 

 

 

 

 

1

 

Additional paid-in capital

 

545,820

 

 

 

704,885

 

 

 

(704,885

)

 

 

545,820

 

Retained earnings (deficit)

 

(1,091,360

)

 

 

(306,177

)

 

 

302,375

 

 

 

(1,095,162

)

Treasury stock, at cost

 

(24,167

)

 

 

 

 

 

 

 

 

(24,167

)

Total shareholders’ equity (deficit)

 

(569,706

)

 

 

398,708

 

 

 

(402,510

)

 

 

(573,508

)

Total liabilities and shareholders’ equity (deficit)

$

1,277,615

 

 

$

647,813

 

 

$

(1,017,848

)

 

$

907,580

 


 

Condensed Consolidating Statement of Operations for the Three Months Ended September 30, 2018

 

Parent Company

 

 

Guarantor Subsidiaries

 

 

Non-Guarantor Adjustments

 

 

Eliminations

 

 

Consolidated W&T Offshore, Inc.

 

 

(In thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues

$

79,740

 

 

$

71,964

 

 

$

1,755

 

 

$

 

 

$

153,459

 

Operating costs and expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Lease operating expenses

 

22,188

 

 

 

15,182

 

 

 

60

 

 

 

 

 

 

37,430

 

Production taxes

 

432

 

 

 

 

 

 

 

 

 

 

 

 

432

 

Gathering and transportation

 

3,193

 

 

 

2,545

 

 

 

41

 

 

 

 

 

 

5,779

 

Depreciation, depletion, amortization

   and accretion

 

19,170

 

 

 

15,568

 

 

 

514

 

 

 

1,717

 

 

 

36,969

 

General and administrative expenses

 

8,812

 

 

 

7,083

 

 

 

95

 

 

 

 

 

 

15,990

 

Derivative gain

 

(288

)

 

 

 

 

 

 

 

 

 

 

 

(288

)

Total costs and expenses

 

53,507

 

 

 

40,378

 

 

 

710

 

 

 

1,717

 

 

 

96,312

 

Operating income

 

26,233

 

 

 

31,586

 

 

 

1,045

 

 

 

(1,717

)

 

 

57,147

 

Earnings of affiliates

 

25,977

 

 

 

 

 

 

 

 

 

(25,977

)

 

 

 

Interest expense

 

11,630

 

 

 

 

 

 

 

 

 

 

 

 

11,630

 

Other (income) expense, net

 

(912

)

 

 

 

 

 

27

 

 

 

 

 

 

(885

)

Income before income tax

   expense (benefit)

 

41,492

 

 

 

31,586

 

 

 

1,018

 

 

 

(27,694

)

 

 

46,402

 

Income tax expense (benefit)

 

(5,467

)

 

 

5,609

 

 

 

 

 

 

 

 

 

142

 

Net income

$

46,959

 

 

$

25,977

 

 

$

1,018

 

 

$

(27,694

)

 

$

46,260

 

 

 


Condensed Consolidating Statement of Operations for the Nine Months Ended September 30, 2018

 

Parent Company

 

 

Guarantor Subsidiaries

 

 

Non-Gurantor Adjustments

 

 

Eliminations

 

 

Consolidated W&T Offshore, Inc.

 

 

(In thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues

$

220,796

 

 

$

214,264

 

 

$

2,224

 

 

$

 

 

$

437,284

 

Operating costs and expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Lease operating expenses

 

63,565

 

 

 

46,194

 

 

 

96

 

 

 

 

 

 

109,855

 

Production taxes

 

1,326

 

 

 

 

 

 

 

 

 

 

 

 

1,326

 

Gathering and transportation

 

8,730

 

 

 

6,983

 

 

 

51

 

 

 

 

 

 

15,764

 

Depreciation, depletion, amortization and accretion

 

58,544

 

 

 

48,125

 

 

 

678

 

 

 

7,460

 

 

 

114,807

 

General and administrative expenses

 

22,869

 

 

 

22,073

 

 

 

306

 

 

 

 

 

 

45,248

 

Derivative loss

 

5,931

 

 

 

 

 

 

 

 

 

 

 

 

5,931

 

Total costs and expenses

 

160,965

 

 

 

123,375

 

 

 

1,131

 

 

 

7,460

 

 

 

292,931

 

Operating income

 

59,831

 

 

 

90,889

 

 

 

1,093

 

 

 

(7,460

)

 

 

144,353

 

Earnings of affiliates

 

72,646

 

 

 

 

 

 

 

 

 

(72,646

)

 

 

 

Interest expense

 

35,100

 

 

 

 

 

 

 

 

 

 

 

 

35,100

 

Other (income) expense, net

 

(1,369

)

 

 

 

 

 

276

 

 

 

 

 

 

(1,093

)

Income before income tax

  expense (benefit)

 

98,746

 

 

 

90,889

 

 

 

817

 

 

 

(80,106

)

 

 

110,346

 

Income tax expense (benefit)

 

(17,880

)

 

 

18,243

 

 

 

 

 

 

 

 

 

363

 

Net income

$

116,626

 

 

$

72,646

 

 

$

817

 

 

$

(80,106

)

 

$

109,983

 

 


 

Condensed Consolidating Statement of Operations for the Three Months Ended September 30, 2017

 

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated

 

 

Parent

 

 

Guarantor

 

 

 

 

 

 

W&T

 

 

Company

 

 

Subsidiaries

 

 

Eliminations

 

 

Offshore, Inc.

 

 

(In thousands)

 

Revenues

$

51,981

 

 

$

58,300

 

 

$

 

 

$

110,281

 

Operating costs and expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Lease operating expenses

 

18,796

 

 

 

16,338

 

 

 

 

 

 

35,134

 

Production taxes

 

340

 

 

 

 

 

 

 

 

 

340

 

Gathering and transportation

 

1,804

 

 

 

2,304

 

 

 

 

 

 

4,108

 

Depreciation, depletion, amortization and accretion

 

18,804

 

 

 

16,855

 

 

 

830

 

 

 

36,489

 

General and administrative expenses

 

7,131

 

 

 

8,500

 

 

 

 

 

 

15,631

 

Derivative loss

 

2,879

 

 

 

 

 

 

 

 

 

2,879

 

Total costs and expenses

 

49,754

 

 

 

43,997

 

 

 

830

 

 

 

94,581

 

Operating income

 

2,227

 

 

 

14,303

 

 

 

(830

)

 

 

15,700

 

Earnings of affiliates

 

13,251

 

 

 

 

 

 

(13,251

)

 

 

 

Interest expense

 

11,554

 

 

 

 

 

 

 

 

 

11,554

 

Other income, net

 

(41

)

 

 

 

 

 

 

 

 

(41

)

Income before income tax expense

 

3,965

 

 

 

14,303

 

 

 

(14,081

)

 

 

4,187

 

Income tax expense

 

4,432

 

 

 

1,052

 

 

 

 

 

 

5,484

 

Net income (loss)

$

(467

)

 

$

13,251

 

 

$

(14,081

)

 

$

(1,297

)

 


 

Condensed Consolidating Statement of Operations for the Nine Months Ended September 30, 2017

 

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated

 

 

Parent

 

 

Guarantor

 

 

 

 

 

 

W&T

 

 

Company

 

 

Subsidiaries

 

 

Eliminations

 

 

Offshore, Inc.

 

 

(In thousands)

 

Revenues

$

163,105

 

 

$

194,892

 

 

$

 

 

$

357,997

 

Operating costs and expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Lease operating expenses

 

59,823

 

 

 

46,994