Ladies and gentlemen, thank you for standing by, and welcome to W&T Offshore's Third Quarter 2025 Conference Call. This conference is being recorded, and a replay will be available on the company's website following the call. I would now like to turn the conference over to Al Petrie, Investor Relations Coordinator. Please go ahead.

Thank you, Alan. And on behalf of the management team, I would like to welcome all of you to today's conference call to review W&T Offshore's Third Quarter 2025 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 forward-looking statements. Today's call may also contain certain non-GAAP financial measures. Please refer to the earnings release that we issued yesterday for disclosures on forward-looking statements and reconciliations of non-GAAP measures. With that, I'd like to turn the call over to Tracy Krohn, our Chairman and CEO.

Thanks, Al. Good morning, everyone, and welcome to our third quarter conference call. With me today are William Williford, our Executive Vice President and Chief Operating Officer; Sameer Parasnis, our Executive Vice President and Chief Financial Officer; and Trey Hartman, our Vice President and Chief Accounting Officer. They're all available to answer questions later during the call. So throughout the first 9 months of 2025, we've delivered strong operational and financial results. As you'll hear throughout the call today, we are continuing to enhance shareholder value through operational excellence and maximizing production across our portfolio of assets. We've been able to increase production in every quarter in 2025, all while only spending about $42 million in capital and maintaining our LOE costs within guidance. Additionally, we paid a consistent quarterly dividend for the past 2 years. So quite simply, we're executing on our proven and successful strategy that is committed to profitability, operational execution, returning value to our stakeholders and ensuring the safety of our employees and contractors. Our ability to deliver production and EBITDA growth while seamlessly integrating accretive producing property acquisitions has helped W&T grow during our 40-year history. Some of our third quarter highlights include the following: we increased production by 6% quarter-over-quarter to 35,600 barrels of oil equivalent per day, near the high end of our guidance range, driven by the successful integration of former Cox assets and high-return workovers and recompletions. Compared to quarter 2 2025, LOE was reduced by 8% to around $23 per barrel oil equivalent with an absolute cost of $76.2 million, which was near the midpoint of guidance and reflects disciplined cost management and operational efficiencies. We grew adjusted EBITDA by 11% quarter-over-quarter to $39 million, despite commodity prices being lower over the same period. We also generated $26.5 million of cash from operating activities and grew our unrestricted cash to approximately $125 million while lowering our net debt to under $226 million. Thus far, in 2025, we've lowered our net debt by about $60 million, further strengthening our balance sheet. Our GAAP reported net loss this quarter primarily reflects a noncash increase to our valuation allowance on deferred tax assets. This is not a deterioration in our underlying business performance. The valuation allowance can be reversed in the future, which will allow W&T to regain the potential tax benefits of the deferred tax assets. We expect substantially all income taxes in 2025 to be deferred. We ended the quarter with around $125 million in unrestricted cash, an undrawn $50 million revolver and $83 million available on our ATM program, positioning us for future growth. So about $0.25 billion in liquidity. We accomplished all of this while returning value to our shareholders through our quarterly dividend. We paid 8 quarterly cash dividends since initiating the dividend policy in late 2023 and announced the fourth quarter 2025 payment that will occur later this month. So I'd like to go into a little more detail about the production results we've been able to deliver in 2025. Third quarter production is up 6% over quarter 2 in 2025 and up 15% over the same quarter in 2024. We've worked hard to increase the production associated with the former Cox assets we acquired in early 2024. By spending on high-return workovers and recompletes, we are efficiently increasing production of these assets as well as at Mobile Bay. In quarter 3, 2025, we performed 3 recompletions on former Cox assets that contributed to higher production during the quarter. Over the life of the company, we've consistently created significant value by methodically integrating producing property acquisitions, enhancing their capabilities and extracting additional value. The assets we acquired last year added meaningful reserves at a very attractive price. We are now seeing the production and cash flow benefits from the work executed by our team to get all those properties online and up to our operating standards and also identify additional production opportunities from these fields. We remain focused on enhancing and offsetting decline at our other properties. And in Q3 2025, we performed 3 workovers in Mobile Bay. This brings the total number of workovers performed in 2025 in Mobile Bay to 8, which has helped to increase production at this low decline, long-life asset, which is also our largest natural gas field. Overall, our production has continued this positive trajectory and averaged above 36,000 barrels oil equivalent per day in October. In the third quarter of 2025, our capital expenditures were $22.5 million, which was an increase over the first 2 quarters of 2025. This increase was driven by a recompletion and facility CapEx work to bring online and increased production of multiple fields related to the 2024 Cox acquisition. In addition, our asset retirement settlement costs totaled approximately $9 million for the quarter. For the full year 2025, we now expect our CapEx to be around $60 million, not including acquisitions. The forecasted increase in full year capital expenditures reflects our strategic investments in owned midstream infrastructure to lower third-party transportation costs and enhanced production and value for 3 fields from the Cox acquisition. This is accretive and will be accretive to cash flow, earnings and reserves. As you can see, operationally, we are performing well, which has allowed us to also focus on improving our balance sheet. Earlier this year, we had several transactions that strengthened and simplified our balance sheet adding material cash to the bottom line and improving our credit ratings from S&P and Moody's. In January, we successfully closed a $350 million offering of new second lien notes that decreased our interest rate by 100 basis points and together with other transactions reduced our total debt by $39 million. We also entered into a new credit agreement for a $50 million revolving credit facility, which matures in July 2028 that is undrawn and replaces the previous $50 million credit facility provided by calculus lending. We also sold a noncore interest at Garden Banks, which included about 200 barrels of oil equivalent per day for $12 million, and we received $58 million in cash for an insurance settlement related to the Mobile Bay 78-1 well. All of these actions have allowed us to enhance liquidity and improve our financial flexibility. So thus far in 2025, we've increased cash by $15 million and reduced our net debt by $60 million. So our ability to execute our strategy has delivered favorable results thus far in 2025, including an improved balance sheet, enhanced liquidity, growing production and EBITDA, all of which has positioned us for success as we move into 2026. We believe we're well positioned to take advantage of opportunities like we have done in the past focusing on accretive low-risk acquisitions of producing properties rather than higher risk drilling in the current uncertain commodity price environment. These acquisitions must meet our stringent criteria of generating free cash flow, providing a solid base of proved reserves with upside potential and offer the ability for our experienced team to reduce costs. With our experience, strong balance sheet and track record of successfully maximizing acquisitions we're ready to add to our portfolio of assets. So yesterday, we provided our detailed guidance for the fourth quarter 2025 and for the full year. In the fourth quarter of 2025, we're expecting the midpoint of production to be around 36,000 barrels of oil equivalent per day. This is another increase in quarterly production, which is especially noteworthy considering that currently, we don't have any drilling operations. The fourth quarter guidance for our cash operating costs, which includes LOE, gathering, transportation and production taxes, and cash G&A costs is in line with the third quarter of 2025. With absolute costs remaining flat and production expected to increase, we believe that on a per BOE basis, we will see additional decreases. We also believe that there are more opportunities to reduce our operating costs and find synergies to drive costs lower in the long term. We're always working hard to reduce costs without impacting safety or deferring asset integrity work. So in conjunction with the pipeline related increase in 2025 capital expenditures, we lowered our gathering, transportation and production taxes guidance for full year 2025 to $24 million to $26 million, primarily due to less reliance on third-party midstream infrastructure. Also, we reduced full year DD&A guidance to $11.50 to $12.50 per barrel of oil equivalent and that represents a 15% decrease from prior guidance. So before we wrap up the call, I'd like to say how proud I am of all the people who helped make W&T a success since we founded the company in 1983. We've been an active operator in the Gulf of America and a staunch advocate for the offshore industry for over 40 years. Through drilling completions and acquisitions, we built a strong company with outstanding long-life assets. As the largest shareholder, I believe we're well positioned to continue to grow and add value in the remainder of 2025. We continue to grow production, EBITDA generation and increase our cash position. This allows us to continue to evaluate growth opportunities, both organically and inorganically. We have a long track record of successfully integrating assets into our portfolio, and we continue to believe that the Gulf of America is a world-class basin that supports value creation. We will maintain our focus on operational excellence and maximizing the cash flow potential of our asset base. So with that, operator, we can now open the lines for questions.

Our first question today comes from John Annis of Texas Capital.

For my first one, you're making a lot of infrastructure investments in the second half of this year to enhance production and lower costs. Once the new pipelines are fully online, could you help us frame how to think about operating costs and maintenance capital in the years ahead as you realize the benefits of these investments?

Sure. We'll first realize those investments in pipeline infrastructure also are accretive to earnings and cash flow and reserves going forward in existing reserves and reserves going forward. So that's the general plan of the company from day one is to make investments in reserve acquisitions, drilling and facility upgrades and workovers and recompletions that all enhance the short-term and long-term value of the corporation. So a very simple philosophy there, John. We work hard to make good acquisitions. We do look at what we can do to enhance the value with drill bit. We do a lot of workovers and recompletions and facility upgrades to enhance the production and reduce cost. So it's a lot of blocking and tackling as well that helps us continue to grow the company. That's why we've been here for over 40 years through all kinds of calamity and production upsets, price changes, wars, hurricanes - everything you can think of and different administrations. So the formula works pretty good. It works better sometimes than others, and that's usually a function of pricing. Prices are down right now, and the company is doing just fine. And I expect that we'll grow the company going forward.

Terrific. I appreciate the color. For my follow-up, with nearly $125 million in cash, could you help characterize the current M&A environment in the Gulf of America and how you are weighing potential deals against organic projects?

Well, I love it. The Gulf of America is open for business again. And we're happy to see it. It's always good to have liquidity and don't forget that not only do we have cash, we have a little bit of credit from you guys too, I think Texas Capital, and we got that $83 million ATM available to us as well. So over $0.25 billion in liquidity, if something comes up that makes sense to us.

Our next question comes from Chris Degner of Water Tower Research.

Congrats on an excellent quarter. I just wanted to chat a little bit about if you can give us any incremental color on the depth of recompletion and workover projects rolling into 2026 and how you think that could support the production base?

Well, you're fortunate. I also have our Chief Operating Officer, I think I'll turn it over to him and let him give you a little color.

Yes. So thank you for the question. Great question. If you look at what we've been able to do in 2025, a lot of the increase quarter-over-quarter, like Tracy mentioned before, we're able to increase our production without really adding any drilling wells during 2025. We have the same thought process going into 2026. Right now, we're working on our budget process right now. And we're feeling very, very good about the opportunities we have moving into 2026 and 2027.

Yes. In addition to that, I'm sure we'll have more to do at Mobile Bay and some of these former Cox properties as a function of budget process. It's a great question. We're just about a few weeks short of having all that sorted out with regard to our internal investigations about our budget.

You mentioned experiencing hurricanes and various challenges. In light of the recent government shutdowns, have you noticed any effects on permitting or any regulatory issues we should be aware of? Or does it seem to be progressing as usual?

There has been zero impact. I think both have done a good job of maintaining the regulatory status and everybody seems to be at work.

That's what it seems like.

Well, that last question with regard to government shutdown was insightful. It really is nice to see that none of it has affected our operations. And to my knowledge, nobody else, the regulators really have done an excellent job of maintaining status quo throughout all this, and I think that's a tribute to them. And I look forward to working with them in the future as new opportunities arise from W&T and others in the Gulf of America so that we can continue to prosper and grow. Sometimes I get a little dismayed at pricing and everything, but that's just a natural part of it. We always managed to adjust during the pandemic; we were producing profitably at $30 a barrel and less. So we know we can adjust. And I always think, gee, what could be worse and there's always something that seems to be worse on the future, but we always manage to adjust, and that's what good companies do. They adjust. So thank you for your attention. We look forward to talking to you in the not-too-distant future.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.