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Edited Transcript of WTI.N earnings conference call or presentation 23-Jun-20 2:00pm GMT

Q1 2020 W&T Offshore Inc Earnings Call

HOUSTON Jun 25, 2020 (Thomson StreetEvents) -- Edited Transcript of W&T Offshore Inc earnings conference call or presentation Tuesday, June 23, 2020 at 2:00:00pm GMT

TEXT version of Transcript

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Corporate Participants

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* Al Petrie

W&T Offshore, Inc. - IR Coordinator

* Janet Yang

W&T Offshore, Inc. - Executive VP & CFO

* Tracy W. Krohn

W&T Offshore, Inc. - Founder, Chairman, CEO & President

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Conference Call Participants

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* Dustin Tillman

Wells Fargo Securities, LLC, Research Division - Trading Analyst

* John Marshall White

Roth Capital Partners, LLC, Research Division - MD & Senior Research Analyst

* Michael Stephen Scialla

Stifel, Nicolaus & Company, Incorporated, Research Division - MD

* Neal David Dingmann

SunTrust Robinson Humphrey, Inc., Research Division - MD

* Patrick John Fitzgerald

Robert W. Baird & Co. Incorporated, Research Division - High Yield Desk Analyst

* Raymond James Deacon

Petro Lotus Energy Advisors - Partner & Director of Research

* Richard Merlin Tullis

Capital One Securities, Inc., Research Division - Senior Analyst of Oil & Gas Exploration and Production

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Presentation

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Operator [1]

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Ladies and gentlemen, thank you for standing by. Welcome to the W&T Offshore First Quarter 2020 Conference Call. (Operator Instructions) This conference is being recorded, and a replay will be made available on the company's website following the call.

At this time, I'd like to turn the conference call over to Al Petrie, Investor Relations Coordinator. Sir, you may begin.

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Al Petrie, W&T Offshore, Inc. - IR Coordinator [2]

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Thank you, operator. On behalf of the management team, I'd like to welcome all of you to today's conference call to review W&T Offshore's First Quarter 2020 Financial and Operational Results.

Before we begin, I would 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 first quarter 2020 earnings release that we released yesterday for a disclosure on forward-looking statements and reconciliations of non-GAAP measures.

At this time, I would like to turn the call over to Tracy Krohn, W&T's Chairman and CEO.

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Tracy W. Krohn, W&T Offshore, Inc. - Founder, Chairman, CEO & President [3]

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Thanks, Al. Good morning, everyone, and thank you for joining us for our first quarter 2020 conference Call. With me today are Janet Yang, our Executive Vice President and Chief Financial Officer; William Williford, our Executive Vice President and General Manager, Gulf of Mexico; Steve Schroeder, our Chief Technical Officer; and Jim Hersch, our Vice President of Geosciences. They're all available to answer questions later during the call.

Over the last several months, the global COVID-19 pandemic, coupled with supply and demand imbalances, have certainly created an environment of uncertainty across the oil sector. We've reacted decisively to those conditions by significantly reducing our capital expenditure budget for the remainder of 2020, lowering our lease operating expenses without compromising safety or operational capabilities and temporarily shutting in some lower-margin operated and nonoperated oil-weighted properties.

As always, we remain committed to the health and safety of our employees and contractors. At our corporate offices, we implemented a mandatory work-from-home policy in March and only recently reopened our corporate office. Despite being back in the office, we continue to monitor the situation and will follow the advice of government and health leaders.

For our field operations, we instituted a screening of all personnel prior to entry to heliports and shore bases as well as our 2 gas plants in Alabama. We are conducting daily temperature screenings and implemented procedures for distancing and hygiene at our field locations. We're very pleased that thus far none of our onshore or offshore employees have tested positive for COVID-19.

For nearly 40 years, we've been able to persevere through multiple pricing cycles because our focus and strategy has always been to maximize cash flow and constantly improve the profitability of our assets at any commodity price. We expect to continue to find value to acquisitions, especially those that provide a solid foundation for our ability to generate free cash flow even in the current pricing environment.

We built W&T through the right combination of attractive property acquisitions, methodical integration and exploitation of those acquisitions, and successful development and exploratory drilling on our legacy fields.

With the well-timed Mobile Bay acquisition in 2019, our production mix has shifted, and we now produce significantly greater volumes of natural gas. We expect to experience less of an impact from the energy downturn than many of our peers since natural gas has not been impacted by the same market forces as crude oil and believe we could benefit from higher natural gas prices as associated natural gas production from oil wells decreases.

So turning to our first quarter results. We're pleased with our performance. We've integrated our acquired assets at Mobile Bay and at Magnolia, and that's after closing the acquisition of the remaining 25% of that deepwater field, maintained a high level of production and continued generating strong adjusted EBITDA and cash flow.

Our costs all came in within or below the guidance we gave for the first quarter. Adjusted EBITDA was $62.1 million despite a weaker pricing environment, while we invested $9.5 million in 2020 CapEx and $24 million in cost related to the 2019 capital program, excluding acquisitions. This is very important because on a cash basis, we continued to create significant value by generating nearly $30 million more of adjusted EBITDA versus our CapEx, which enabled us to reduce long-term debt at a substantial discount. One of the pillars of our success is our ability to generate positive cash flow.

In the first quarter of 2020, our production averaged 53,553 barrels of oil equivalent per day or 4.9 million barrel of oil equivalent. That was up 61% compared with the first quarter of 2019 and up slightly compared to the fourth quarter of 2019. This was near the high end of our first quarter guidance range, included a full 3 months of production from both the Mobile Bay acquisition and the initial 75% interest acquired in the Magnolia field in 2019.

Total liquids production comprised 48% of production in the first quarter of 2020. So in late April, we announced that we had temporarily shut-in approximately 3,300 barrels of oil equivalent per day of net production in selected oil-weighted fields operated by us and also received notice of production curtailments from third-party operators, totaling approximately 3,400 barrels of oil equivalent per day net to W&T. Recently, about 2,900 BOE per day of those third-party shut-in volumes will return to production, and we continue to monitor the market to determine the appropriate time to return our operated production curtailments to production.

In addition, we temporarily shut-in a portion of our production due to tropical storm Cristobal with an estimated net impact of about 110,000 net barrels of oil equivalent of deferred production in the second quarter. We did not experience any material damage to our facilities due to the storm. As a reminder, we have withdrawn our production and cost guidance for the balance of 2020 due to the combination of ongoing uncertainty in commodity markets, production curtailments and proactive efforts to continually reduce costs in this lower price environment. We intend to again provide guidance once we have greater visibility in where markets are heading.

So for the first quarter of 2020, our average realized sales price per barrel of oil equivalent declined about 20% compared with the fourth quarter, with declines in pricing for oil, NGLs and natural gas. Our average realized crude oil sales price was $46.33 per barrel, which once again compared favorably with average WTI pricing of $45.34 per barrel during the period. Our NGL sales price was $13.03 per barrel, and our natural gas price was $1.91 per Mcf.

Revenues for the first quarter decreased quarter-over-quarter by 18% to $124.1 million. The decrease was driven by lower realized pricing despite the slight increase in sales volumes.

Our first quarter LOE came in at $54.8 million, which was within guidance, but higher than both the first and fourth quarters of 2019 due to additional operating costs associated with our 2 recent acquisitions. Since the sharp downturn in prices in the first quarter, we've developed even more ways to reduce our LOE costs. This includes actions such as reducing our contract labor costs, reducing transportation costs by consolidation of transit to offshore locations and working with our suppliers to achieve cost savings in maintenance, workover and facility expenses. We will not reduce our commitment to safety, operational compliance or environmental protection with any of these actions. In total, we expect to reduce our LOE by about 15% to 25% from prior levels. We'll give you more details on the results of these efforts during our second quarter call.

Our G&A expense in the first quarter of 2020 was $14 million, which was well below our guidance of $15.5 million to $17 million. The decline from $17.6 million in G&A in the fourth quarter of 2019 was due primarily to higher fourth quarter 2019 accrual adjustments for incentive compensation and lower legal costs during the first quarter of 2020. We continue to look at how we can further reduce our G&A costs.

We reported net income in the first quarter 2020 of $66 million or $0.46 per share, which included $52.5 million in unrealized commodity derivative gain and $18.5 million noncash gain associated with the debt reduction transaction. Our adjusted net income was $5.8 million or $0.04 per share.

So another way that we've responded to this current environment is by using some of our free cash flow to repurchase a portion of our outstanding 9.75% per senior second lien notes. In the first quarter, we repurchased $27.5 million in principal of our outstanding notes for $8.5 million, which led to the noncash gain. Thus far in the second quarter of 2020, we've repurchased an additional $45.1 million of those same note for $15.3 million. That's about $72.5 million of long-term debt that we've repurchased year-to-date for just under $24 million, which has reduced our annualized interest expense by over $7 million. We believe that this was a very good use of free cash and will help place W&T on an even better financial footing moving forward.

W&T's bank group recently completed its regularly scheduled spring borrowing base redetermination. The borrowing base was set by the bank group at $215 million, down modestly from $250 million. Additionally, the amended agreement provides for the suspension of the total leverage covenant and the addition of a first lien covenant of 2:1 through year-end 2021. Additional details can be found in our 10-Q. The next regularly scheduled redetermination is in the fall of 2020.

Additionally, we have added several oil and natural gas hedges since our last call, and a detailed schedule is in yesterday's release. So after all these actions so far this year, as of June 17, 2020, our total liquidity stood at $156 million, comprised of about $27 million in cash and $129 million in availability under our revolving credit facility. Our long-term debt remaining on our senior notes has declined to $552.5 million from $625 million. We believe we continue to have a strong balance sheet and have more than sufficient liquidity to meet our needs going forward and to continue to look at good opportunities that may arise in this downturn.

Turning now to operations. We successfully drilled 1 well in the first quarter of 2020 at East Cameron 338/349, but decided to suspend all other drilling activity due to the current uncertain pricing environment. We remain confident in our extensive inventory of high-quality prospects, and we're encouraged by the recent improvement in crude oil prices and the outlook for natural gas price improvements this winter. With that said, we remain focused on cash flow generation in the near and long term. And we will continue to evaluate when it is best for W&T to resume drilling, but at this time, we have no active drilling and completions operations.

In the first quarter, the Cota well in the East Cameron 338/349 field was successfully drilled in over 290 feet of water and to a total depth of over 6,000 feet. We encountered approximately 100 feet of net oil pay and currently own a 20% interest in the Cota well, which will increase to 38.4% once the well is brought online and performance thresholds are met. Initial production is planned for the first half of 2021, subject to the commodity price environment and the completion of certain infrastructure projects. So during the first quarter, we performed 1 well recompletion and 4 workovers that resulted in an additional 700 net BOE per day.

As we previously announced, W&T was the parent high bidder on 2 blocks in the Gulf of Mexico Lease Sale 254, held by the BOEM on March 18, which included 1 deepwater block and 1 shallow water block. These 2 blocks cover a total of approximately 10,760 acres. And if awarded, we will pay approximately $700,000 for 100% working interest in the awarded leases combined.

So in closing, we remain optimistic about the future for W&T. We have a premier portfolio of both shallow water and deepwater properties in the Gulf of Mexico with low decline rates and significant upside. The proactive actions that we have undertaken this year to reduce CapEx and LOE, coupled with our strong hedge book offering downside protection on commodity prices, should allow us to continue to generate strong cash flow even in a lower pricing environment.

We remain opportunistic in this environment, and we'll look for ways that we can add value to W&T as we have done thus far in 2020, reducing LOE costs and closely managing our capital spending. We remain focused on operating efficiently and executing our long-term strategy, while maintaining our strong balance sheet to maximize shareholder value. Our management team's interests are highly aligned with those of our shareholders, given our 34% stake in W&T's equity, which is one of the highest of any public E&P company. This alignment of interest ensures that we are truly incentivized to maximize shareholder value and mitigate risk. Shareholders should expect to see more acquisitions in the future as well.

With that, operator, we can open up the lines for questions.

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Questions and Answers

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Operator [1]

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(Operator Instructions) And our first question today comes from John White from Roth Capital.

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John Marshall White, Roth Capital Partners, LLC, Research Division - MD & Senior Research Analyst [2]

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Congratulations on the good results, Tracy. You certainly know the playbook during a downturn.

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Tracy W. Krohn, W&T Offshore, Inc. - Founder, Chairman, CEO & President [3]

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Thanks, John.

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John Marshall White, Roth Capital Partners, LLC, Research Division - MD & Senior Research Analyst [4]

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Yes, I thought the buying back second lien was very opportunistic and a very good move. You mentioned -- I believe you said with regard to further 2020 activity, no new wells are planning to be spud. I just wanted to confirm that. And -- so I take it that means most activity is going to be continued recompletions and workovers?

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Tracy W. Krohn, W&T Offshore, Inc. - Founder, Chairman, CEO & President [5]

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Yes. I think that's the way we see it right now. Of course, if prices creep on up, then we'll open up the pocketbook a little bit and be able to get some more work done with the drill bid.

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John Marshall White, Roth Capital Partners, LLC, Research Division - MD & Senior Research Analyst [6]

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And you mentioned more -- to expect more acquisitions in the future. How would you describe the deal landscape in the Gulf, given the current environment?

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Tracy W. Krohn, W&T Offshore, Inc. - Founder, Chairman, CEO & President [7]

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Well, I think there's a lot of opportunity there. Most of the companies that have had problems are going to get eliminated or absorbed. The ones that don't are going to continue to succeed.

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Operator [8]

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Our next question comes from Richard Tullis from Capital One Securities.

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Richard Merlin Tullis, Capital One Securities, Inc., Research Division - Senior Analyst of Oil & Gas Exploration and Production [9]

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Tracy, I know you withdrew guidance for the full year and just had a couple of comments with the last caller on activity. But what do you think it takes to kind of get back to even moderate growth mode, say, in the second half of the year and into 2021? What sort of oil price would you be looking at and combination of service cost reductions?

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Tracy W. Krohn, W&T Offshore, Inc. - Founder, Chairman, CEO & President [10]

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Well, that's a fairly complex question, Richard. It's got many moving parts to it. If I was going to guess a price, I'd tell you something around $50 would make us feel pretty comfortable. We recognize that service companies have had their issues as well. Everybody is struggling with personnel and the pandemic, of course. But I do think that the future is pretty good long term. And that's what we're looking at. We realize that there's some things that need to happen in our -- in this basin to make it better for everyone. So we're waiting to see what pricing is going to do. That's the biggest driver. I wish I could tell you that it isn't, but it is. I think we're adequately hedged at this point or close to it. So I'm confident that we can withstand just about anything. Of course, every time I say that, something else nasty happens. So I guess I probably ought to stop saying that. But I think we're pretty well protected at this point.

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Richard Merlin Tullis, Capital One Securities, Inc., Research Division - Senior Analyst of Oil & Gas Exploration and Production [11]

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That's helpful. And then for my follow-up, Tracy or Janet, what is the corporate decline rate at this point given the reduction in CapEx?

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Tracy W. Krohn, W&T Offshore, Inc. - Founder, Chairman, CEO & President [12]

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Corporate decline rate, I'm not sure I understand that term. Do you mean the production decline rate or the corporate -- I don't know what corporate decline rate...

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Richard Merlin Tullis, Capital One Securities, Inc., Research Division - Senior Analyst of Oil & Gas Exploration and Production [13]

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Yes, yes. For the entire company's production base.

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Tracy W. Krohn, W&T Offshore, Inc. - Founder, Chairman, CEO & President [14]

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[RFP is about 10].

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Operator [15]

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Our next question comes from Mike Scallia from Stifel.

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Michael Stephen Scialla, Stifel, Nicolaus & Company, Incorporated, Research Division - MD [16]

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Tracy, you mentioned you'd like to see something around $50 before you got active again with the drill bid. I'm just wondering kind of along the same lines, kind of price or can you put in a price on what you'd need to see before you bring the shut-in volumes back online?

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Tracy W. Krohn, W&T Offshore, Inc. - Founder, Chairman, CEO & President [17]

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Well, actually, we're starting to bring those shut-in volumes back online now. So that should give you some encouragement. Some of them -- couple of these fields that were near end-of-life anyway and were just kind of hanging on, those probably won't be coming back online. So I think we'll get up fairly quickly with the production of the stuff that was brought online that's not just anemic.

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Michael Stephen Scialla, Stifel, Nicolaus & Company, Incorporated, Research Division - MD [18]

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Okay. Good. And I want to get your thoughts on used free cash flow. Obviously, very opportunistic, as was pointed out on paying down the second lien. Looking forward, would that be the preference? Or how do you balance that between paying down the revolver since now you have the covenant is just focused on first lien debt? So -- and also any restrictions on paying down either of those 2?

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Tracy W. Krohn, W&T Offshore, Inc. - Founder, Chairman, CEO & President [19]

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Well, actually, the latter part of your question there is more conducive to what we're likely to do. We don't have the first lien capability of going out and spending more money to buy debt. Apparently, the RBLs don't like you buying debt from other people and putting theirs at risk. So that is the covenant with regard to buying more second lien debt.

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Operator [20]

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Our next question comes from Patrick Fitzgerald from Baird.

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Patrick John Fitzgerald, Robert W. Baird & Co. Incorporated, Research Division - High Yield Desk Analyst [21]

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Yes, I echo the sentiments on the debt repurchase. Well done.

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Tracy W. Krohn, W&T Offshore, Inc. - Founder, Chairman, CEO & President [22]

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Thank you.

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Patrick John Fitzgerald, Robert W. Baird & Co. Incorporated, Research Division - High Yield Desk Analyst [23]

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So a lot of my questions have been asked, but I wanted to ask, I guess, Janet. Working capital for the remainder of the year, you -- that was a nice source of cash this quarter. How do you expect that to unfold for the remainder of '20?

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Janet Yang, W&T Offshore, Inc. - Executive VP & CFO [24]

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I think with activity going down, I don't expect it to be -- we don't expect there -- I mean, generally speaking, we're forecasting out. We're not forecast -- we take a conservative stance on it. But yes, I think working capital should be okay. It'd be relatively flat for the rest of the year. I think, a lot of it depends on the [benefits] in the first -- kind of second quarter.

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Patrick John Fitzgerald, Robert W. Baird & Co. Incorporated, Research Division - High Yield Desk Analyst [25]

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Okay. And then on your plug and abandonment, your -- the current portion of that on the balance sheet declined from 22 to 3. Is that just a timing issue? And if you could talk about how you see that unfolding in '20? And I guess, any further than that would be helpful.

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Janet Yang, W&T Offshore, Inc. - Executive VP & CFO [26]

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It is a timing issue. And I think Tracy can comment on that a little bit more as well.

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Tracy W. Krohn, W&T Offshore, Inc. - Founder, Chairman, CEO & President [27]

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Yes. There's no overwhelming obligation to do the ARO work as we've forecasted it so far for the rest of the year.

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Operator [28]

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Our next question comes from Ray Deacon from Petro Lotus Analytics.

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Raymond James Deacon, Petro Lotus Energy Advisors - Partner & Director of Research [29]

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I was wondering how the 3.5-year roughly payout on repurchasing debt compares to the recompletions that you're planning to do this year in terms of what kind of return you're getting?

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Tracy W. Krohn, W&T Offshore, Inc. - Founder, Chairman, CEO & President [30]

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You finally asked the right question. How does it compare to other things that we might want to do? Very good, right? Yes. Yes, now you got it. Do we buy more debt back or do we go out and try to make more money doing acquisitions and drilling wells? That's really the internal question for us, right?

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Raymond James Deacon, Petro Lotus Energy Advisors - Partner & Director of Research [31]

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Yes.

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Tracy W. Krohn, W&T Offshore, Inc. - Founder, Chairman, CEO & President [32]

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So that's exactly how we're looking at it. You got it. What makes more sense, and it's a pretty perfunctory function when you get to the bottom of it, what is more profitable. So it's really fairly -- it was a fairly easy give to say, all right, well, we're not going to buy back any more debt. We're going to go ahead and do more work. So we're approaching that kind of marginality with that decision, which way do you go. So as the price goes up, the decision gets real easy.

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Raymond James Deacon, Petro Lotus Energy Advisors - Partner & Director of Research [33]

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Okay. Got it. And then just what's the update on the JV? I think you've drilled 9 out of 14 wells was the last number I've seen. Is that kind of the first thing you go after once you get back to drilling?

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Tracy W. Krohn, W&T Offshore, Inc. - Founder, Chairman, CEO & President [34]

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Yes.

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Operator [35]

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Our next question comes from Neal Dingmann from SunTrust.

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Neal David Dingmann, SunTrust Robinson Humphrey, Inc., Research Division - MD [36]

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My first question, just building on what Ray was saying. Tracy, I like the acquisition you did that you -- I guess you closed in early March where you did the purchase sale agreement to acquire that 25% remaining working interest. To me, that always seems to be the most economical when you can continue to do that. Again, do you have other opportunities to add working interest like that? I mean, to me, obviously, you don't have to use any more expenses to do so and always seems to be the most economic. So just wondering if you have more opportunities like that in the portfolio.

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Tracy W. Krohn, W&T Offshore, Inc. - Founder, Chairman, CEO & President [37]

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Let me see if I can explain this very concisely. You can bet your ass on it, okay?

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Neal David Dingmann, SunTrust Robinson Humphrey, Inc., Research Division - MD [38]

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That's very good to be concise. Very good. And then just my follow-up to that would be, just given what we see now in this environment, we've certainly seen onshore prices on services come down. Could you just talk color on now when you go back to work, what you're seeing in prices today versus even 6 or 12 months ago?

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Tracy W. Krohn, W&T Offshore, Inc. - Founder, Chairman, CEO & President [39]

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Yes. I commented on this last year, when people were telling me that the prices were going up, oil was $60-something a barrel and service costs were going up. And I always thought that was seasonal. And sure enough, it was not only seasonal, unfortunately, prices began to drop as well. So activity went down. So there's certainly a point at which you can't go any lower because your suppliers just can't get their cost down any further. So we don't want to see that happen. We want people to be able to operate at a profit. On the other hand, the hard part for us is making sure that we have access to quality personnel and equipment. And I think we're pretty close to that margin right now. So it's going to be some sort of rebalancing going along, and it really has more -- the biggest impact is transportation, boats and helicopters and insurance and then personnel.

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Neal David Dingmann, SunTrust Robinson Humphrey, Inc., Research Division - MD [40]

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Got it. Got it. Nice cash flow.

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Tracy W. Krohn, W&T Offshore, Inc. - Founder, Chairman, CEO & President [41]

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Sure. Thank you.

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Operator [42]

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(Operator Instructions) Our next question comes from Dustin Tillman from Wells Fargo.

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Dustin Tillman, Wells Fargo Securities, LLC, Research Division - Trading Analyst [43]

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Tracy, I wanted to ask about the surety market. We've seen, in some instances, some of your competitors where sureties are asking for collateral, including one scenario where the company suing -- or the surety suing the company. What do you see as the health of the surety market? Any changes that are happening there as some of your competitors are under pressure?

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Tracy W. Krohn, W&T Offshore, Inc. - Founder, Chairman, CEO & President [44]

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Well, again, without knowing the specifics, it's hard for me to answer that. We haven't experienced any issues with our sureties. In fact, the experience has been quite the opposite. The company is in good shape. We're meeting all of our obligations, and we'll be able to do so for -- hopefully, for the rest of my lifetime. So I don't really see any angst among the sureties. Markets go up and down -- rates go up and down a little bit depending upon how the markets are. But other than that, we're not experiencing any anxiety at all.

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Dustin Tillman, Wells Fargo Securities, LLC, Research Division - Trading Analyst [45]

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So they're not up -- and there's no calls for collateral from the surety?

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Tracy W. Krohn, W&T Offshore, Inc. - Founder, Chairman, CEO & President [46]

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No, sir.

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Dustin Tillman, Wells Fargo Securities, LLC, Research Division - Trading Analyst [47]

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Okay. Great. And can -- I wanted to follow up on one of the previous questions that was asked about P&A obligations. And maybe for -- you could just help us better understand, usually, thinking about shutting in wells and having -- you talked about some production that won't come back online, most people would expect that, that would result in more near-term P&A spend. And it sounds like you're saying that you have the ability to push some of that off. So can you just explain or help us understand the time frame of when that P&A work would have to be done?

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Tracy W. Krohn, W&T Offshore, Inc. - Founder, Chairman, CEO & President [48]

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Now, generally, after you cease production, you're required to plug and abandonment within a year. So -- I'm sorry, excuse me, 18 months. So yes. So there are at least 18 months down the line. Clearly, if you go out and you put a field back online, you got to go out and make these visits every once in a while anyway. So if prices get up, high enough, you put them back online and then you defer for yet another 18 months. But we're at least 18 months or close to that away from having to do any of those abandonments on those marginal fields.

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Dustin Tillman, Wells Fargo Securities, LLC, Research Division - Trading Analyst [49]

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Okay. And that's why the current P&A liability was reduced because the view is that can be delayed?

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Tracy W. Krohn, W&T Offshore, Inc. - Founder, Chairman, CEO & President [50]

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That's correct.

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Operator [51]

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And ladies and gentlemen, at this time, in showing no additional questions, we'll end today's question-and-answer session. I'd like to turn the conference call back over to Tracy Krohn for any closing remarks.

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Tracy W. Krohn, W&T Offshore, Inc. - Founder, Chairman, CEO & President [52]

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Well, thanks for listening, everyone. We appreciate it, and we'll have another conversation next quarter, if not sooner. Thanks so much. Goodbye.

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Operator [53]

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Ladies and gentlemen, the conference has now concluded. We do thank you for attending today's presentation. You may now disconnect your lines.