W&T Offshore acquires $32M Gulf of Mexico assets, boosts production


W&T Offshore, Inc. (NYSE: WTI), an independent oil and natural gas producer in the Gulf of Mexico, has successfully finalized the acquisition of eight prime oil and gas producing assets located in the Gulf of Mexico’s central and eastern shelf region. These assets were acquired from an anonymous private seller for a gross consideration of $32 million. This strategic acquisition is particularly noteworthy as it stands to enhance W&T’s offshore portfolio significantly.

Key Acquisition Details:

  • W&T purchased assets in the Gulf of Mexico with water depths ranging from 25 to 265 feet, seamlessly aligning with its existing operations.
  • The acquired assets have a high average working interest of approximately 72%.
  • As of September 12, 2023, these assets are expected to produce about 2,400 barrels of oil equivalent per day, with oil constituting 42%.
  • An impressive addition of 3.2 million barrels of oil equivalent (49% oil) in proved reserves is noted – all of which are developed.
  • The gross purchase price multiple is roughly 1.0x the last twelve months’ cash flows as of the effective date.
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W&T Offshore’s Chairman, President, and CEO, Tracy W. Krohn, expressed immense satisfaction with the acquisition, emphasizing its alignment with the company’s longstanding investment criteria. “These assets are prime examples of our focus on strong production rates, positive free cash flow, and proven developed reserves. Our expertise in acquiring complementary Gulf of Mexico assets only augments our growing scale. Acquisitions have always been central to our strategy for growth, and this is another milestone in adding value for our stockholders,” stated Krohn.

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A Deep Dive into the Acquired Assets:

Covering 30,646 gross acres (22,079 net acres), the assets are currently producing an estimated 2,400 barrels of oil equivalent daily. Proved reserves for the properties, as of June 1, 2023, tally at 3.2 million barrels of oil equivalent (49% oil). Furthermore, the 2P reserves of the purchased properties are estimated at 5.1 million barrels of oil equivalent (48% oil). All the reserve figures are based on the reserve report prepared internally using the NYMEX strip pricing as of September 12, 2023.

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In summary, this acquisition by W&T Offshore underscores the company’s continued commitment to leveraging the Gulf of Mexico’s potential and enhancing shareholder value.

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