W&T Offshore plans to offer $350 million in senior second lien notes to fund a tender offer and debt repayment.
Quiver AI Summary
W&T Offshore, Inc. has announced its intention to offer $350 million in senior second lien notes due 2029 in a private offering exempt from registration under the Securities Act. The proceeds will be used to purchase outstanding 2026 Senior Second Lien Notes through a tender offer, redeem any remaining notes not tendered, repay a term loan from Munich Re Risk Financing, and cover related expenses. This announcement is not an offer to sell the notes and they will only be offered to qualified institutional buyers and non-U.S. investors. W&T Offshore is an independent oil and gas producer operating in the Gulf of Mexico with significant working interests in multiple fields. The company includes cautionary forward-looking statements about the offering and its intended use of proceeds, emphasizing uncertainties that could impact future performance.
Potential Positives
- W&T Offshore is offering $350 million in senior second lien notes due 2029, which could strengthen its capital structure and provide necessary funding.
- The proceeds from the offering will be used to tender and redeem outstanding debt, including 2026 Senior Second Lien Notes, which can potentially reduce interest expenses and enhance financial flexibility.
- By repaying the MRE Term Loan and addressing its debt obligations, the company is taking steps to improve its balance sheet and financial health.
- The announcement reflects a proactive approach to managing and restructuring debt, which can positively influence investor confidence and enhance the company's long-term stability.
Potential Negatives
- The company is incurring additional debt by offering $350 million in senior second lien notes, which may increase financial risk and strain future cash flows.
- The need to redeem outstanding high-interest debt suggests potential liquidity issues, raising concerns about the company's financial health.
- The offering is subject to market conditions and may not be guaranteed, indicating uncertainty in the company's ability to raise the intended capital.
FAQ
What is W&T Offshore planning to offer in 2025?
W&T Offshore intends to offer $350 million in senior second lien notes due 2029.
How will W&T Offshore use the proceeds from the offering?
The proceeds will be used to repurchase outstanding notes, redeem remaining notes, repay loans, and cover related expenses.
Who can purchase the senior second lien notes?
The notes will be offered only to qualified institutional buyers and non-U.S. investors under specific regulations.
Are the senior second lien notes registered under the Securities Act?
No, the notes and related guarantees have not been registered and will be offered via exemptions.
What are the risks associated with the offering?
Risks include market conditions, oil price volatility, production uncertainties, and future capital expenditures, among others.
Disclaimer: This is an AI-generated summary of a press release distributed by GlobeNewswire. The model used to summarize this release may make mistakes. See the full release here.
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Full Release
HOUSTON, Jan. 13, 2025 (GLOBE NEWSWIRE) -- W&T Offshore, Inc. (NYSE: WTI) (“W&T Offshore” or the “Company”) today announced its intention to offer, subject to market and other conditions, $350 million in aggregate principal amount of senior second lien notes due 2029 (the “Notes”) in a private offering that is exempt from registration under the Securities Act of 1933, as amended (the “Securities Act”).
The Company intends to use the net proceeds of the offering, along with cash on hand, to (i) purchase for cash pursuant to a tender offer, WTI’s outstanding 11.750% Senior Second Lien Notes due 2026 (the “2026 Senior Second Lien Notes”) that are properly tendered pursuant to the terms thereof (the “Tender Offer”), (ii) on or after August 1, 2025, redeem in full any remaining 2026 Senior Second Lien Notes not validly tendered and accepted for purchase in the Tender Offer and, pending such redemption, satisfy and discharge the indenture governing the 2026 Senior Second Lien Notes, (iii) repay outstanding amounts under the term loan provided by Munich Re Risk Financing, Inc., as lender (the “MRE Term Loan”), and (iv) pay premiums, fees and expenses related to the Offering, the Tender Offer, the redemption of any 2026 Senior Second Lien Notes, the satisfaction and discharge of the indenture governing the 2026 Senior Second Lien Notes and the repayment and termination of the MRE Term Loan. This announcement is not an offer to purchase or a solicitation of an offer to sell the 2026 Senior Second Lien Notes, and it does not constitute a notice of redemption of the 2026 Senior Second Lien Notes.
The Notes and the related guarantees to be offered have not been registered under the Securities Act or any other securities laws, and the Notes and the related guarantees may not be offered or sold except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and any other applicable securities laws. The Notes and the related guarantees will be offered only to persons reasonably believed to be qualified institutional buyers in the United States under Rule 144A and to non-U.S. investors outside the United States pursuant to Regulation S.
This press release is being issued pursuant to Rule 135c under the Securities Act and does not constitute an offer to sell, a solicitation of an offer to buy, or a sale of the Notes, the related guarantees, or any other securities, nor does it constitute an offer to sell, a solicitation of an offer to buy or a sale in any jurisdiction in which such offer, solicitation or sale is unlawful.
ABOUT W&T OFFSHORE
W&T Offshore, Inc. is an independent oil and natural gas producer with operations offshore in the Gulf of Mexico and has grown through acquisitions, exploration and development. As of September 30, 2024, the Company had working interests in 53 fields in federal and state waters (which include 46 fields in federal waters and 7 in state waters). The Company has under lease approximately 673,100 gross acres (515,400 net acres) spanning across the outer continental shelf off the coasts of Louisiana, Texas, Mississippi and Alabama, with approximately 514,000 gross acres on the conventional shelf, approximately 153,500 gross acres in the deepwater and 5,600 gross acres in Alabama state waters. A majority of the Company’s daily production is derived from wells it operates.
FORWARD-LOOKING AND CAUTIONARY STATEMENTS
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements reflect our current views with respect to future events, including the completion, timing and size of the proposed offering, the intended use of the proceeds, including to fund the Tender Offer, redeem in full any remaining 2026 Senior Second Lien Notes not validly tendered and accepted for purchase pursuant to the Tender Offer and satisfy and discharge the indenture governing the 2026 Senior Second Lien Notes, repay the MRE Term Loan, and pay premiums, fees and expenses related to the aforementioned, and the terms of the Notes being offered, based on what we believe are reasonable estimates and assumptions. No assurance can be given, however, that these events will occur or that our estimates will be correct. These statements are subject to risks and uncertainties that could cause actual results to differ materially including, among other things, market conditions, oil and gas price volatility, uncertainties inherent in oil and gas production operations and estimating reserves, uncertainties of the timing and impact of bringing new wells online and repairing and restoring infrastructure hurricane damage, the ability to achieve leverage targets, unexpected future capital expenditures, competition, the success of our risk management activities, governmental regulations, uncertainties and other factors discussed in our Annual Report on Form 10-K for the year ended December 31, 2023 and subsequent Form 10-Q reports found at
www.sec.gov
. Investors are urged to consider closely the disclosures and risk factors in these reports.
CONTACT:
Al Petrie
Investor Relations Coordinator
investorrelations@wtoffshore.com
713-297-8024
Sameer Parasnis
Executive Vice President and Chief Financial Officer
sparasnis@wtoffshore.com
713-513-8654
Source: W&T Offshore, Inc.
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