W&T offshore Q2 loss narrower than expected, revenues decline Y/Y

Key takeaways

• WTI reports Q2 loss of $0.08 per share, better than expected but worse than last year's $0.05 loss.

• Revenues fall to $122.4M from $143M; production slips to 33.5 MBoe/d due to freezing shutdowns.

• Lower costs aid earnings; realized oil price drops to $63.55/bbl, gas price rises to $3.75/Mcf.

W&T Offshore Inc. (WTI - Free Report) reported a second-quarter 2025 loss of 8 cents per share (excluding one item), narrower than the Zacks Consensus Estimate of a loss of 14 cents. However, the bottom line deteriorated from the year-ago quarter’s reported loss of 5 cents per share.

Total quarterly revenues of $122.4 million missed the Zacks Consensus Estimate of $137 million. The top line decreased from $143 million reported in the prior-year quarter.

The better-than-expected quarterly earnings can be primarily attributed to lower operating expenses, partially offset by lower production and realized prices for oil-equivalent output.

W&T Offshore, Inc. price, consensus and EPS surprise

Production statistics

Production for the quarter averaged 33.5 thousand barrels of oil equivalent per day (MBoe/d), down from 34.9 MBoe/d in the corresponding period of 2024. The reported figure came in lower than our estimate of 34.5 MBoe/d.

Oil production totaled 1,259 thousand barrels (MBbls), down from 1,382 MBbls in the year-ago quarter. The figure missed our estimate of 1,427 MBbls.

Natural gas liquids output totaled 245 MBbls, which decreased from the year-ago quarter’s level of 334 MBbls. Our estimate for the same was pinned at 226 MBbls.

Natural gas production of 9,285 million cubic feet (MMcf) was higher than 8,769 MMcf in the prior-year quarter. The figure beat our estimate of 8,897 MMcf.

Realized cxommodity prices

The average realized price for oil in the second quarter was $63.55 per barrel, lower than the year-ago quarter’s level of $80.29. Our estimate for the same was pegged at $65.57.

The average realized price of NGL decreased to $19.24 per barrel from $24.43 reported a year ago. The figure came in lower than our estimate of $20.07 per barrel.

The average realized price of natural gas in the June-end quarter was $3.75 per thousand cubic feet, up from $2.50 in the corresponding period of 2024 and lower than our estimate of $3.79.

The average realized price for oil-equivalent output decreased to $39.16 per barrel from $44.40 a year ago. The figure was below our estimate of $42.04 per barrel.

Operating expenses

Lease operating expenses increased to $25.20 per Boe from $23.29 in the year-ago period. The reported figure was higher than our estimate of $22.84 per Boe.

Also, general and administrative expenses decreased to $5.79 per Boe from $6.72 a year ago. The figure was higher than our estimate of $5.37 per Boe.

Cash flow

Net cash provided by operations totaled $27.9 million compared with $37.4 million in the prior-year quarter.

The free cash flow decreased to $3.6 million from $18.7 million in the year-earlier quarter.

Capital spending and balance sheet

W&T Offshore spent $10.4 million on oil and gas resources and equipment.

As of June 30, 2025, cash and cash equivalents totaled $120.7 million, and net long-term debt amounted to $350.1 million. The current portion of the long-term debt is $0.6 million.

Guidance

For the third quarter of 2025, W&T Offshore expects production to be in the range of 3,043-3,368 Mboe. For 2025, production is anticipated to remain unchanged in the band of 11,983-13,257 Mboe.

Further, the company expects third-quarter lease operating expenses to be in the $71.5-$79.3 million range. For full-year 2025, lease operating expenses are anticipated to be in the $280-$310 million band.

Full-year capital expenditures are expected to be in the range of $34-$42 million.

WTI’s Zacks rank and key picks

WTI currently carries a Zacks Rank #4 (Sell).

Investors interested in the energy sector may look at a couple of better-ranked stocks like Antero Midstream Corporation (AM - Free Report) , Delek Logistics Partners, LP (DKL - Free Report) and Enbridge Inc. (ENB - Free Report) , each carrying a Zacks Rank #2 (Buy) at present. 

Antero Midstream generates stable cash flow by providing midstream services under long-term contracts with Antero Resources. The company prioritizes debt reduction by effectively utilizing free cash flow after dividends. Antero Midstream’s higher dividend yield compared to its sub-industry peers reflects its commitment to generating shareholder returns.

AM’s earnings beat estimates in one of the trailing four quarters, met once and missed in the other two, delivering an average negative surprise of 5.50%.

Delek Logistics owns, operates, acquires and constructs crude oil and refined products logistics and marketing assets. DKL operates crude oil transportation pipelines, refined product pipelines, crude oil gathering systems and associated crude oil storage tanks.

Delek Logistics’ earnings beat estimates in two of the trailing four quarters, met once and missed in the other, delivering an average surprise of 79.8%. The Zacks Consensus Estimate for DKL’s 2025 earnings indicates 30.43% year-over-year growth.

Enbridge is a major energy company that owns the longest and most complex oil and gas pipeline system in North America, transporting about 20% of the natural gas used in the United States. The business earns steady fees through long-term contracts, protecting it against big oil price swings or changes in shipment. 

ENB’s earnings beat estimates in two of the trailing four quarters, met once and missed in the other, delivering an average surprise of 0.28%.

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