History
W&T Offshore grew through Gulf of Mexico acquisitions, survived a 2016 debt-for-equity restructuring, refinanced out of it by 2018, and refinanced into 2029 second-lien notes in early 2025.
2006-2009: A big shelf bet
W&T set out to build scale in the Gulf of Mexico. On August 30, 2006 it completed a $1.03 billion purchase of Kerr-McGee's Gulf of Mexico shelf subsidiary, adding interests in roughly 100 fields across 242 offshore blocks. It was the largest deal in the company's history and made W&T the third-largest holder of shelf acreage in the Gulf. In June 2007 it sold $450 million of 8.25% senior notes due 2014, using substantially all of the proceeds to repay part of its bank credit facility borrowings. That swapped bank debt for fixed-rate long-term debt rather than adding spending capacity. The record for 2008 and 2009 is quiet.
2010-2013: Deepwater, the Permian and more Gulf deals
Acquisitions resumed in 2010. W&T bought Total's Matterhorn and Virgo interests for $117.5 million net cash, adding an estimated 11.6 million barrels of oil equivalent in reserves. It then agreed to pay Shell Offshore $395 million for five deepwater fields, but BP exercised a preferential purchase right on two of them, Marlin and Dorado, and W&T paid about $121.9 million for the rest: Tahoe, SE Tahoe and Droshky.
In May 2011 it entered the Permian Basin, buying assets from Opal Resources for $377.8 million, with about 27 million barrels of oil equivalent in proved reserves. In June it priced $600 million of 8.5% notes due 2019 and used them to buy back about 90% ($406 million) of the 2014 notes, stripping most covenants from the rest.
In October 2012 it closed the purchase of 78 Gulf lease blocks from Newfield Exploration for about $208 million, funded partly by a $300 million add-on to the 2019 notes, priced at 106% of face value. In November 2013 it began closing on Callon Petroleum properties, including a 15% interest in the Medusa field, for about $76.4 million. Share count barely moved across these years, at about 74 to 76 million.
2014-2015: The downturn bites
The record for 2014 is quiet. By May 2015, with oil prices still falling, W&T added a $300 million second-lien term loan from Morgan Stanley Senior Funding on top of its bank revolver. In September it agreed to sell its Permian field, Yellow Rose, to Ajax Resources for $376.1 million, keeping a 1-4% sliding-scale royalty. The sale closed on October 21 and the proceeds paid down the revolver. In November, lenders removed the leverage and interest coverage covenants on the revolver but tightened the first-lien leverage ratio, a sign of continued strain.
2016-2017: The debt-for-equity exchange
In February 2016 W&T drew $340 million on its revolver and disclosed talks with federal regulators about posting extra assurances for well plugging and decommissioning costs. In March, lenders cut the borrowing base to $150 million from $350 million, leaving the company about $191 million over the new limit.
Its answer, launched in July, was an exchange offer for its $900 million of 8.5% notes due 2019. Lenders required at least 85% participation and a new $75 million term loan. In August W&T raised the shares on offer from 62.1 million to 76.6 million and dropped the minimum-tender condition. By the early deadline holders of about 79% had tendered. The exchange completed on September 13, 2016: holders of $710.2 million gave up their notes for 60,435,544 new shares, $159.8 million of second lien notes due 2020 and $142.0 million of third lien notes due 2021. W&T also took a new $75 million loan at 11%. The new shares roughly doubled the share count, from about 76.5 million at the end of 2015 to about 137.7 million a year later. Roughly $190 million of the 2019 notes remained outstanding.
2018-2022: Leaving the restructured debt behind
In October 2018 W&T priced $625 million of 9.75% second-lien notes due 2023, closed the offering with a new $250 million bank facility, and used the proceeds to retire its term loans and redeem all of the 2019, 2020 and 2021 notes, fully exiting the 2016 structure. In 2019 it agreed to buy ExxonMobil's Alabama offshore properties, closing in September for $167.6 million cash, taking over nine producing fields and an onshore treating facility. In May 2021 it financed its Mobile Bay assets through new subsidiaries, Aquasition LLC and Aquasition II LLC, which took a non-recourse term loan from Munich Re Reserve Risk Financing secured only by those assets. The record for 2020 and 2022 is quiet.
2023-2025: Dividend, deal delays and a new debt stack
In January 2023 W&T issued $275 million of 11.75% second-lien notes due 2026 and, with cash on hand, redeemed all of its outstanding 2023 notes. In September it agreed to buy central-shelf fields from Cox Oil and Energy XXI entities, but terminated the deal in October after the extended deadline passed. In November its board approved its first-ever quarterly dividend, $0.01 per share. In December it signed a smaller deal with the same sellers, dropping Eugene Island 24.
In March 2024 it deferred about $30.1 million of 2024 principal payments on the Munich Re loan, with repayments to resume in 2025. In July 2024 it replaced Ernst & Young with Deloitte & Touche as auditor and extended its credit agreement maturity by six months to December 31, 2024. In January 2025 it settled an insurance claim over a 2023 loss at its Mobile Bay 78-1 well for $58.5 million.
On February 3, 2025 W&T raised $350 million of 10.75% second-lien notes due 2029 and used the money to clear its old bank facility, the Munich Re loan and the rest of the 2026 notes. The same day it signed a new $50 million revolver with Texas Capital Bank holding a first claim on the same properties, ranking ahead of the new notes.
Written from the 40 story beats below (2006 to 3 Feb 2025), which come from the company's own announcements and filings.