WTI Q2 Earnings Beat Estimates on Strong Oil Pricing & Cost Control

The strong quarterly results were driven by higher realized prices and disciplined operating costs.

Average production was 34.7 thousand barrels of oil equivalent per day (MBoe/d), up 3% at the midpoint of guidance.

WTI's Realized Oil Pricing Increases

Before derivative settlements, W&T Offshore's average realized sales price rose 28% to $50.23 per barrel of oil equivalent (Boe) from $39.16 per Boe recorded in the prior-year quarter. Oil pricing was the standout, increasing 56% to $99.30 per barrel from $63.55 per barrel in the year-ago quarter.

Natural gas realized prices were $3.31 per thousand cubic feet (Mcf), down 12% from $3.75 per Mcf in the year-ago quarter, while natural gas liquids (NGL) pricing declined 5% to $18.35 per barrel from $19.24 per barrel in the second quarter of 2025.

Oil revenues increased to $120.45 million from $80.01 million a year earlier, while natural gas revenues declined to $32.09 million from $34.80 million.

W&T Offshore Keeps Production Steady

Total sales volumes were 3,157 thousand barrels of oil equivalent (Mboe), up 3% from 3,052 MBoe in the prior-year period. Oil volumes declined 4% to 1,213 thousand barrels (MBbls), while NGL volumes increased 34% to 329 MBbls and natural gas volumes rose 4% to 9,689 million cubic feet (MMcf).

Liquids accounted for 49% of second-quarter production. W&T Offshore completed three workovers and one recompletion during the quarter, and management plans to continue using these low-cost, short-payout projects to support production and revenues.

WTI Holds Lease Operating Costs in Check

Lease operating expenses (LOE) were $71.56 million, down 7% and below the low end of guidance. On a unit basis, LOE decreased 10% to $22.67 per Boe. Some facility and workover spending was deferred into the third quarter.

Gathering, transportation and production taxes were $6.57 million, up 19% but below the low end of guidance. The company attributed the favorable guidance comparison to the Williams Mobile Bay Gas Processing Facility being offline for planned maintenance during April while natural gas volumes bypassed the plant.

W&T Offshore Posts Higher Adjusted EBITDA

Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) rose 54% to $54.41 million from $35.24 million a year ago. Adjusted net income was $3.53 million against an adjusted net loss of $11.80 million in the prior-year quarter.

Adjusted general and administrative expenses were $16.45 million, up 11%. Reported G&A rose to $27.51 million, reflecting higher non-cash share-based compensation tied to the quarter-end valuation of certain awards.

WTI Strengthens Cash & Liquidity

Free cash flow increased to $31.38 million from $3.58 million a year earlier. Capital expenditures totaled $10.36 million.

As of June 30, 2026, WTI had $150.68 million of unrestricted cash and cash equivalents and $194.10 million of total available liquidity. Net debt totaled $200.90 million and net debt to trailing 12-month Adjusted EBITDA was 1.2X.

The company declared a third-quarter dividend of 1 cent per share.

W&T Offshore Sees Slight Production Uptick in Q3

For the third quarter of 2026, W&T Offshore expects average daily production to be in the range of 33.3-36.8 MBoe/d. Full-year production guidance remains in the range of 33.5-37.2 MBoe/d.

Third-quarter LOE is projected to be between $73 million and $81 million. The increase reflects about $3 million of facility and workover projects deferred from the second quarter and roughly $2 million of workover projects moved forward from the fourth quarter. Full-year capital expenditures are projected to be in the range of $19.5-$24.5 million, with plugging and abandonment spending forecast at $34-$42.4 million.

WTI’s Zacks Rank & Key Picks

W&T Offshore currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks from the energy sector are PBF Energy Inc. PBF, Valero Energy Corporation VLO and Cactus, Inc. WHD. PBF sports a Zacks Rank #1 (Strong Buy), while VLO and WHD carry a Zacks Rank #2 (Buy) each, at present. You can see the complete list of today’s Zacks Rank #1 stocks here.

PBF reported second-quarter 2026 adjusted earnings of $6.22 per share, surpassing the Zacks Consensus Estimate of $4.05 per share.

As of June 30, 2026, PBF had total debt of $1.75 billion, and cash and cash equivalents of $894.1 million.

Valero reported second-quarter 2026 adjusted earnings of $12.54 per share, which beat the Zacks Consensus Estimate of $9.87 per share.

As of June 30, 2026, VLO had total debt of $9.10 billion, and cash and cash equivalents of $7.87 billion.

Cactus reported second-quarter 2026 adjusted earnings of 93 cents per share, surpassing the Zacks Consensus Estimate of 71 cents per share.

As of June 30, 2026, WHD had cash and cash equivalents of $365 million.

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