 Submitted By Aaron NematNejad
This is a sister article to the analysis of ExpressJet. The purpose of this article is to compare oil company analyses to analyses of aviation companies. I will describe the financial statements of WTI and highlight key differences. The article will begin with a glossary of major terms used in analyzing oil companies, followed by financial statements and accounting diagrams relevant to oil companies. The final sections will contain quantitative and qualitative tests to arrive at a valuation for WTI. This is meant as a general guide to oil company analysis, and is not a buy or sell recommendation.
Company Description
W&T Offshore is an independent oil and natural gas company focused on the Gulf of Mexico area. They engage in oil and natural gas acquisitions, exploration, exploitation and production activities. They own interests in approximately 158 producing oil and natural gas fields in state and federal waters, and operate wells accounting for approximately 59% of their average daily production. WTI is the third largest shelf acreage holder in the Gulf of Mexico. They own interests in approximately 523 offshore structures, of which 322 are platforms in the fields that they operate.
WTI grows their reserves via acquisitions and drilling programs. On August 24, 2006, WTI closed the acquisition of a wholly owned subsidiary of Kerr-McGee Oil & Gas Corporation, a merger for approximately $1.1 Bn (subject to post-closing adjustments).
Glossary of Oil and Natural Gas Terms
Bbl. One stock tank barrel or 42 US gallons liquid Volume
Bcf. Billion cubic feet.
Bcfe. Billion cubic feet equivalent.
Conventional shelf well. A well drilled in water depth less than 500 feet.
Deep shelf well. A well drilled to depth greater than 15’000 feet.
Dry hole well. A well found incapable of producing hydrocarbons in a cost efficient manner.
MBbls. One thousand barrels of crude oil.
Mcf. A thousand cubic feet.
Mcfe. One thousand cubic feet equivalent.
MMBbls. One million barrels of crude oil.
PV-10 Value. The present value of the revenues generated from the production of proved reserves. The “10” refers to a discount rate of 10%.
(Please note that when an abbreviation has M as the first letter it refers to 1000 units of quantity. MM refers to a million. )
Financial Statements for W&T Offshore
|
Income Statement
|
|
In 000's
|
|
Revenues
|
|
|
|
|
Oil and natural gas
|
800,348
|
|
|
Other
|
118
|
|
|
Total revenue
|
800,466
|
|
|
|
|
|
Operating costs and expenses:
|
Lease operating
|
109652
|
|
|
Gathering, transportation and production taxes
|
17697
|
|
|
Depreciation, depletion and amortization
|
325131
|
|
|
Asset retirement obligation accretion
|
12496
|
|
|
General and administrative
|
42119
|
|
|
Commodity derivative gain
|
-24244
|
|
|
Total Operating costs and expenses
|
482851
|
|
|
|
|
|
Operating income
|
|
317,615
|
|
|
|
|
|
|
Interest expense, net of amount capitalized
|
17180
|
|
|
Other Income (primarily consists of interest income)
|
5919
|
|
|
|
|
|
Income before income Taxes
|
|
306,354
|
|
|
|
|
|
Income taxes (35%)
|
|
107250
|
|
|
|
|
|
Net Income
|
|
199,104
|
|
EPS
|
|
2.84
|
Oil and gas companies very often hedge their oil prices by undertaking derivatives contracts. Most oil and gas companies will split their oil and natural gas revenues and costs in a separate diagram as can be seen in the diagram below.
|
|
Quantity
|
Price
|
|
Revenue
|
|
Natural Gas (MMcf)
|
60,447.0
|
7.08
|
$/Mcf
|
427,964,760.0
|
|
Oil (MBbls)
|
6,456.0
|
57.7
|
$/Bbl
|
372,511,200.0
|
|
Total natural gas and oil (Bcfe)
|
99,183.0
|
|
|
800,475,960.0
|
Please note that 6 MMcf is equivalent to 1 MBbls. (The revenues represented above are actual dollar amounts).
|
Balance Sheet
|
|
|
|
|
|
|
|
Current Assets
|
|
|
|
Cash and cash equivalents
|
|
39,235
|
|
|
|
|
|
Receivables
|
|
|
|
|
Oil and gas sales
|
98,362
|
|
|
Joint interest and other
|
50,681
|
|
|
Insurance receivables
|
75,151
|
|
|
Income Taxes
|
15,705
|
|
Total receivables
|
|
239,899
|
|
|
|
|
|
Prepaid expenses and other assets
|
|
49,559
|
|
|
|
|
|
Total Current Assets
|
|
328,693.00
|
|
|
|
|
|
|
|
|
|
Long Term Assets
|
|
|
|
|
|
|
|
Property and equipment -at cost:
|
|
|
|
|
Oil and gas properties and equipment
|
3,297,153
|
|
|
Furniture, fixtures and other
|
10,948
|
|
Total Property and equipment
|
|
3,308,101
|
|
|
|
|
|
Depreciation, depletion and amortization
|
|
1,042,315
|
|
|
|
|
|
Net Property and equipment
|
|
2,265,786
|
|
|
|
|
|
Restricted deposits for asset retirement
|
|
10,680
|
|
|
|
|
|
Other assets
|
|
4,526
|
|
|
|
|
|
Total Assets
|
|
2,609,685
|
|
|
|
|
|
Current Liabilities
|
|
|
|
|
|
|
|
Current maturities of long term debt
|
|
271,380
|
|
Accounts Payable
|
|
247,324
|
|
Undistributed oil and gas proceeds
|
|
46,933
|
|
Asset retirement obligations
|
|
41,718
|
|
Accrued liabilities
|
|
28,825
|
|
Deferred income taxes-current portion
|
|
7,896
|
|
|
|
|
|
Total current Liabilities
|
|
644,076
|
|
|
|
|
|
Long term debt (net of discount)
|
|
413,617
|
|
Asset retirement obligations
|
|
272,350
|
|
Deferred Income taxes
|
|
232,835
|
|
Other liabilities
|
|
3,890
|
|
|
|
|
|
Total long term liabilities
|
|
922,692
|
|
Total Liabilities
|
|
1,566,768
|
|
|
|
|
|
Net Equity
|
|
1,042,917
|
|
|
|
|
|
Cash Flow
|
|
|
|
|
|
|
|
Operating Activities
|
|
|
|
|
|
|
|
|
Net Income
|
199,104
|
|
Adjustments to reconcile net income to net cash
|
|
|
|
|
|
|
|
|
Depreciation, depletion, amortization and accretion
|
337,627
|
|
|
Amortization of debt issuance costs
|
1,417
|
|
|
accretion of discount on long term debt
|
6,765
|
|
|
share based compensation
|
2,544
|
|
|
unrealized commodity derivative gains
|
(13,476)
|
|
|
deferred income taxes
|
106,645
|
|
|
Other
|
511
|
|
|
|
|
|
|
|
|
|
Changes in operating assets and liabilities
|
|
|
|
|
|
|
|
|
Oil and gas receivables
|
(54,470)
|
|
|
Joint interest in other receivables
|
(17,584)
|
|
|
Insurance receivables
|
(61,301)
|
|
|
Income Taxes
|
(47,313)
|
|
|
prepaid expenses and other assets
|
(27,168)
|
|
|
asset retirement obligations
|
(24,492)
|
|
|
accounts payable and accrued liabilities
|
162,274
|
|
|
other liabilities
|
506
|
|
|
|
|
|
Net cash provided by operating activities
|
|
571,589
|
|
|
|
|
|
Investing activities
|
|
|
|
|
|
|
|
|
Acquisition of Kerr McGee properties
|
(1,061,769)
|
|
|
Investments in oil and gas property and equipment
|
(588,978)
|
|
|
Other
|
(4,825)
|
|
|
|
(331)
|
|
|
Net cash used in investing activities
|
(1,655,903)
|
|
|
|
|
|
|
|
|
|
Financing activities
|
Borrowings of long term debt
|
1,123,732
|
|
|
Repayments of borrowings of long term debt
|
(485,500)
|
|
|
Proceeds from equity offering
|
306,979
|
|
|
Dividends to shareholders
|
(8,225)
|
|
|
Debt issuance costs
|
(1,135)
|
|
|
|
|
|
|
Net Cash provided in financing activities
|
935,851
|
|
|
|
|
|
Net Cash Flow
|
|
(148,463)
|
Quantitative Tests of W&T Offshore
Qualitative Checks for W&T Offshore
Competition and risk
Did you like this article?
|
's
make money online earn
generic cialis
buy viagra
avodart
propecia
viagra
lumigan
careprost
generic cialis
generic levitra
propecia
シアリス
レビトラ
プロペシア
バイアグラ
ルミガン
ケアプロスト
アボダート
naperville dentist aurora dentist chicago movers online pharmacy web hosting provider about online trading the cost of credit cards why you should invest southwest airline credit card What is acid test ratio and ROA ratio? Free Your Mind and Check Your Credit Scores Online Seek Recommendations When Re-Financing The Importance of Diversification Credit card services Long Term Investments for the Future choosing a lender secured credit card Credit Cards For High School Students Investing for Retirement Ideal Offers For Credit Cards Credit Score Management and Information budgeting The Decision to Re-Finance Why You Should Invest Getting the Bait on Good Home Loan Terms Despite Bad Credit Score Credit Cards With Cash Rebate Personal Loan Scams How To Avoid Late Fees Revenue and receivables The Importance of Diversification Credit Score: Ways on How You Can Boost It Avoiding Impulse Spending Tips to Check and Improve Your Credit Score How to Know When to Sell Your Stocks Credit Cards And Credit Reports Is It Time to Re-Finance? Determining Where You Will Invest Small Business Credit Cards Student Credit Cards what is a corporation Does It Pay to Re-Finance? Credit card debt consolidation Finding Re-Financing Information Different Types of Bonds Parts of an Income Statement, Part 3 Bookkeeping Comparison Shopping When Re-Financing Vacation And Credit Cards Managing the Bottom Line What Is Your Investment Style? Rebates – Reward or Rip Off? Avoiding Impulse Spending Credit Score Rating Scale: How It Is Done and What It Does To You Types of Costs Options For Good Credit Cards Balance Sheet About Online Trading The Budget – The Ultimate Financial Management Tool Credit Score: Getting Your Bad Credit Rating Repaired Profit and Loss Is Re-Financing Worth the Hassle? The Range Towards a Successful Credit Application Online Personal Loans What is the FASB? High FICO Score on Credit Report Obtains Positive Responses Accept credit card Different Types of Stock What happened in corporate accounting scandals? Is business credit card helpful? Re-Financing to Consolidate Debt Credit Scores: What's It About and What Makes a Good Credit Score? Different Types of Investments Spend Wisely to Save Money Careers Making a Profit Personal Loan Research What is forensic accounting? Bank Secured Credit Cards Benefits of Re-Financing Collection Process on Personal Loans What are other ratios used in financial reporting High or Low: Keeping Track with National Average Credit Score How to analyze a financial statement Uses of Personal Loans Books on Personal Loans Credit Cards Without A Bank Account Check your Free Credit Report and Be Wary of your Score Is it ok to apply online for credit card? What Is Accounting Anyway? Spend Wisely to Save Money Credit card processing Investing and financing Online Re-Financing Different Types of Investments All about credit card rate Checking Mortgage Rates Online Online credit card Eliminate credit card debt Choosing a Fixed or ARM Option Re-Financing with an Interest Only Mortgage Basic Accounting Principles Unsecured Personal Loans Building Cash Reserves The Air Mile Credit Card Why Should I Make a Budget? Investing Basics – What Are Your Investment Goals Investment Strategy Personal Loan Insurance Determining Where You Will Invest Long Term Investments for the Future Free Credit Report: Know About Your Credit Score For Free Envision a Better Life by Increasing Your Credit Score Understanding Re-Financing Getting A Higher Limit On Your Credit Card What are partnerships and limited liability companies? Careers Is Re-Financing Always Worthwhile? Why Should I Make a Budget? Student credit cards Rebates – Reward or Rip Off? Should I apply for a credit card and how? Choosing Your Credit Card Bookkeeping Basics Personal Loan Collection Officer Credit Card Reward Cards Types of Personal Loans Parts of an Income Statement, part 1 What are independent auditors? Ways to Generate Funds without taking a Personal Loan Depreciation reporting Personal Loan Officers Quasar Software Comparing Credit Cards Choosing Your Reward Card When Is It a Mistake to Re-Finance? Understanding Bonds What is a Cash Out Re-Finance? About GAAP Accounting Principles Credit card Choosing a Broker How Much Money Should You Invest? Consolidate credit card debt Getting Your Credit Card Online Tax Considerations When Re-Financing Protecting Your Personal Information Re-Financing with an ARM Disclosure American Express Credit Cards Chase.com credit card offers Choosing A Broker How to Know When to Sell Your Stocks Need Information about Credit Scores? Try going ONLINE! Consolidate Your Credit Card Debt Your Credit Score Report is in Good Hands Things to Consider when Searching for a Personal Loan Re-Financing with Bad Credit Improving Your Credit Score: Ways to Do It Quickly Low interest credit cards What is a Personal Loan? How is accounting used in business? Getting Approved Instantly Online Inventory and expenses How Can Credit Score System Works for your Financial Needs? How To Improve Your Credit Score the Easy Way A bad credit credit card Are You Considering Re-Financing? Investing for Retirement The Budget – The Ultimate Financial Management Tool You and Your Credit Score: What's The Good Number? Credit card offer Investing Mistakes to Avoid Important Information on Credit Scoring and its Effects to You Different Types of Bonds The Importance of Average Credit Score in US Credit Card Fraud Investing Mistakes to Avoid Determine Your Risk Tolerance Credit Card Debt Being a Co-signer on a Personal Loan Assets and Liabilities Depreciation Determine Your Risk Tolerance What does an audit report contain? Educate yourself about Personal Loans on the Internet What does an audit do? Understanding Bonds Personal Loans vs. Home Equity Loans Measuring Costs Chase credit cards Gains and Losses Who uses forensic accountants? What are auditors? UK credit cards and balance transfers Personal Loans for Bad Credit Re-Financing with a Line of Credit Loan What is a sole proprietorship? Re-Financing with Shorter Loan Terms Improving your Credit Score is Just Three Steps Away Credit card deal Bad Credit Score: Effective Ways to Repair It What Is Your Investment Style? Rejection of credit card application What to do if you are Turned Down for a Personal Loan Investing Basics – What Are Your Investment Goals What is financial window dressing? Getting Your Feet Wet – Begin Investing All about college credit cards Ways to Eliminate Debt with a Personal Loan Learning about Re-Financing Online Debt Management for Personal Loans What happened at Enron? Parts of an Income Statement, Part 2 What is the Sarbanes-Oxley Act? Stabilize Your Current Situation Before You Invest Financing Information 42 What is price/earnings ratio Secured Personal Loans Questions to ask Lenders before Committing to a Personal Loan Getting Your Feet Wet – Begin Investing 43 What's the difference between private and public company reporting Personal Accounting IndexIgnore * free online psychic chat psychic hotlines psychic powers psychic counsellors psychic acadamy psychic jobs free psychic phone call different types of psychic powers free psychic readings online psychic aura colours psychic ability work at home psychic jobs pet psychics psychic chat rooms psychic predictions psychic chat rooms ab workout routine hypnosis home study course glamour affecting our daily lives article traffic conversational hypnosis buy backlinks how to view private facebook profiles Reverse Cell Phone Number Search Extreme Fat Loss Conversational Hypnosis techniques Conversation Starter Skills Making of Love Best Muscle Gain Secrets Cure Any Disease hypnosis home study courses How to build self esteem How to develop intuition Body Fat Loss NOW Fast Fat Loss Number One Wholesale and Dropshipping Source Learn Spanish Book Be a Professional Blogger The forgotten laws of attraction Top Paying Oil Pipeline Jobs Create your own professional resumes from home Best Fat Loss Program Free Money Making Opportunities Online Video Hypnosis Source Energy Money Making Adsense Website Anime Movie Downloads Renewable Energy Systems Registry Cleaner Free Search Engine Secrets Who lives on my street chinchilla wheels what do chinchillas eat? gluten allergy symptoms wheat allergy symptoms nut allergy symptoms autopsy reports of famous people testing for allergies dust allergy chakra centers heal famous tv couples franklin tn dust allergy problems meaning of each tarot card Negative Effects of Gambling Christmas Bargains Portfolio Fashion Tips Chinchilla Facts christmas craft ideasشات الشله | شات
I'm a little late finding
I'm a little late finding this article, but I loved it.
Do you love sports, do you feel like to look cool, i got a very awesome website here introduced by one of my friends. Very good website where you can find the Authentic nike shoes with latest and huge style of nike air max shoes and dunk sb shoes. I have bought from them for so many times, and very satisfied with the their goods and service.Such as Air max 1, air max 2, air max 90, nike air max 2009+, air max 2010 new, nike air max TN, nike air ltd trainers, air max 95.Air max 360 running shoes, nike shox shoes. Though their price are low, don't worry about it's quality.
Christmas is coming, go there to find presents for your friends or family. They are on sale, limited time!
WellPoint BVLGARI Watches
Thank you for great
AVCHD Video Converter, Sony
Replica Gucci Handbags Louis
There are loads of brand
Today, more and more people
escort and massage shanghai
Thank you very much for this
Largest selection of
W&T Offshore Inc.. how to
i like what you say, and i