W&T Offshore, Inc. (NYSE:WTI) Q2 2022 Earnings Conference Call August 8, 2022 10:00 AM ET

Company Participants

Brent Collins - Director, IR

Tracy Krohn - Chairman & CEO

Janet Yang - EVP & CFO

Conference Call Participants

Michael Scialla - Stifel

Jeff Robertson - Water Tower Research

Operator

Good morning, and welcome to the W&T Offshore Second Quarter 2022 Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note, this event is being recorded.

I’d now like to turn the conference over to Brent Collins, Director of Investor Relations. Please go ahead.

Brent Collins

Thank you, operator. And on behalf of the management team, I'd like to welcome all of you to today's conference call to review W&T second quarter 2022 financial and operational results.

Before we begin, I’d 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 those forward-looking statements. Today's call may also contain certain non-GAAP financial measures. Please refer to the earnings release that we issued this morning, 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.

Tracy Krohn

Thanks, Brent. Good day to everyone and thanks for joining us for our second quarter 2022 conference call. So with me today are Janet Yang, our Executive Vice President and Chief Financial Officer; and William Williford, our Executive Vice President and Chief Operating Officer. They'll be available to help answer questions later during the call.

Our financial results in the second quarter were among the best quarterly results in our history. Our strategy has always been simple, generate free cash flow, maintain high quality conventional production, and opportunistically capitalize on accretive opportunities to build shareholder value. Our ability to execute and maintain strong operational excellence was a significant driver in our outstanding financial results in the second quarter.

So here's the key things we delivered in the quarter. Average daily production increased 12% quarter-over-quarter and that was above the high end of guidance. LOE costs were below the low-end of guidance. We took advantage of the sharp increase in natural gas forward prices and monetize value from a portion of our natural gas hedge position, while still maintaining our ability to participate in higher natural gas prices by entering into new gas coal contracts with higher strike prices. This resulted in a net gain on the transaction of $138 million and net cash proceeds of $105.3 million and was clearly a big contributor to our financial results in the quarter. We generated net income of $23.4 million or $0.85 per diluted share.