W&T Offshore (NYSE:WTI) management highlighted higher production, improved liquidity, and lower net debt during the company’s fourth-quarter and full-year 2025 earnings call, while outlining plans to hold production roughly flat in 2026 with a materially lower capital budget and continued focus on workovers, recompletions, and operating efficiencies.
2025 results: quarterly production gains and $130 million in adjusted EBITDA
Chairman and CEO Tracy Krohn said the company delivered “solid operational and financial results” in 2025 by focusing on cash flow generation, optimizing conventional Gulf of Mexico assets, and pursuing accretive opportunities. Krohn said production increased each quarter of 2025, rising from 30,500 barrels of oil equivalent per day (Boe/d) in the first quarter to 36,200 Boe/d in the fourth quarter, driven by production enhancement projects rather than new drilling.
In the fourth quarter, Krohn said production increased 2% sequentially from the third quarter and was up 13% from the same period in 2024. He attributed the performance to production uplift projects and ramp-up work on fields acquired in 2024, noting that by the fourth quarter of 2025 the company had completed “all the major projects on the acquired assets,” bringing those properties up to W&T’s operating standards.
Costs and capital: LOE improvement and West Delta 73 project completion
W&T emphasized cost control and synergy capture, including lower lease operating expense (LOE) in the fourth quarter. Krohn said fourth-quarter LOE was $22.40 per Boe, down 4% from the third quarter, and that absolute costs came in below the midpoint of guidance.
The company’s $55 million 2025 capital program came in below the low end of guidance, Krohn said, and was “back half loaded” due to recompletions and facility work tied to the 2024 acquisition. He also noted the completion of a $20 million pipeline facility project at West Delta 73 in the fourth quarter, which management expects will support production growth, improve operational performance, and increase net realized pricing, with benefits expected to show up in the first quarter of 2026.
W&T also reported $37 million in asset retirement settlement costs in 2025 as it continued decommissioning work.
Balance sheet actions: higher cash, lower net debt, and refinancing activity
Management pointed to several 2025 transactions aimed at improving liquidity and simplifying the balance sheet. Krohn said W&T closed a $350 million offering of new second lien notes in January that lowered interest rates by 100 basis points and, along with other transactions, reduced total debt by $39 million. The company also entered into a new $50 million revolving credit facility maturing in July 2028 to replace its prior $50 million facility with Calculus Lending.
Additional liquidity items cited on the call included the sale of a non-core interest at Garden Banks for $12 million (about 200 Boe/d of production) and receipt of $58 million in cash from an insurance settlement related to the Mobile Bay 78-1 well.
As a result of the year’s operating and financing actions, Krohn said W&T ended 2025 with nearly $141 million of cash, up $31 million year over year, and net debt of $210 million, down $74 million.
Krohn also noted the company has paid nine consecutive quarterly cash dividends since initiating its dividend policy in late 2023 and announced a first-quarter 2026 dividend payment scheduled for later in the month.
Reserves: 121 MMboe proved, $1.12 billion PV-10 and higher PDP mix
W&T reported year-end 2025 SEC proved reserves of 121 million Boe with a PV-10 value of $1.12 billion, which Krohn said was achieved in a “reduced price environment.” He added that proved developed producing (PDP) PV-10 increased by $279 million versus year-end 2024 as reserves were reclassified into PDP.
Management said the proved reserve base at year-end 2025 was weighted toward developed reserves:
- 71% proved developed producing
- 24% proved developed non-producing
- 5% proved undeveloped
By comparison, Krohn said at year-end 2024 W&T’s reserves were 52% proved developed producing and 17% proved undeveloped. The company’s reserve life index at year-end 2025, based on 2025 production, was 9.8 years.
In terms of product mix, management said year-end 2025 proved reserves were approximately 42% liquids (32% crude oil and 10% NGLs) and 58% natural gas.
2026 outlook: production midpoint around 35,000 Boe/d and lower capex
In guidance discussed on the call, Krohn said first-quarter 2026 production was impacted by unplanned downtime from winter freezes at several fields. W&T expects first-quarter production at a midpoint of about 35,000 Boe/d. For the full year, the company also expects production at a midpoint of around 35,000 Boe/d, assuming no additional acquisitions or drilling.
W&T plans to reduce capital spending meaningfully in 2026 following the completion of several 2025 projects. Krohn said 2026 capital expenditures are expected to be about $22 million at the midpoint—less than half of 2025 spending—excluding acquisitions. Plugging and abandonment expense is forecast at about $38 million in 2026, roughly in line with 2025’s $37 million.
On operating costs, Krohn said 2026 LOE is projected to be lower than 2025, attributing the improvement to stabilization of acquired fields, synergy capture, and benefits from 2025 capital work. W&T guided to first-quarter 2026 LOE of $63 million to $70 million and full-year LOE of $265 million to $295 million. First-quarter gathering, transportation, and production taxes are expected to be $8 million to $9 million, while first-quarter cash G&A is expected to be $15 million to $17 million.
During the Q&A, COO William Williford discussed operational inventory supporting the maintenance of production levels. He cited ongoing stimulations at the company’s Mobile Bay gas asset, with additional stimulations approved for 2026, as well as recompletions in certain deepwater fields already on W&T’s reserve books. Williford said the workover and recompletion opportunities can help flatten declines and potentially increase production.
On strategy, Krohn reiterated that W&T’s primary growth focus remains acquisitions of producing properties rather than drilling, describing acquisitions as lower risk in an uncertain commodity price environment. In response to an analyst question, he said the company has prospect inventory but believes efforts are better placed on acquisitions at present, adding most prospects are held by production.
Management also discussed proposed Department of the Interior changes related to financial assurance requirements. Krohn said the DOI has proposed revisions that would roll back obligations from a 2024 rule that would have required about $6.9 billion in supplemental financial assurance, with the proposed changes potentially reducing industry-wide bonding by approximately $484 million annually. The proposal has been published in the Federal Register with a 60-day public comment period expected to end May 8, 2026. Krohn said W&T welcomes the proposed revisions and, in response to a question, stated the changes should reduce insurance premium costs over time.
In closing remarks, Krohn pointed to geopolitical uncertainty and regulatory dynamics affecting the industry, while saying the company expects “better news next quarter as well.”
About W&T Offshore (NYSE:WTI)
W&T Offshore, Inc is an independent oil and gas exploration and production company focused primarily on offshore operations in the Gulf of Mexico. The company acquires, develops and produces crude oil and natural gas reserves, operating a portfolio of producing properties that encompasses both shallow-water and deepwater assets. W&T Offshore leverages its technical expertise and asset management capabilities to optimize field development and production efficiency across its portfolio.
Founded in 1983 and headquartered in Covington, Louisiana, W&T Offshore has built a track record of disciplined growth through strategic acquisitions and targeted exploration activities.
