WT Offshore 2025 Q2 Earnings Worsening Losses Despite Production Growth

W&T Offshore reported its fiscal 2025 Q2 earnings on Aug 05th, 2025, showing a revenue decline of 15.2% year-over-year. The company posted a net loss of $0.14 per share, representing a 40.0% wider loss compared to the previous year. Despite these losses, the company increased production by 10% quarter-over-quarter.

Revenue
W&T Offshore’s total revenue fell to $119.53 million in Q2 2025, down from $141.03 million in the same period in 2024, a 15.2% decrease. The decline in revenue was attributed to a 16% decrease in realized prices per Boe and a 12% decrease from $44.40 per Boe in Q2 2024. The company’s oil, NGLs, and natural gas prices before realized derivative settlements were $63.55 per barrel of oil, $19.24 per barrel of NGL, and $3.75 per Mcf of natural gas.

Earnings/Net Income
W&T Offshore’s net loss widened to $-20.88 million in Q2 2025, representing a 35.7% increase from the $-15.39 million loss in Q2 2024. On a per-share basis, the company’s losses deepened to $0.14 per share from a loss of $0.10 per share in the previous year. Adjusted Net Loss totaled $11.8 million, or $0.08 per diluted share, which primarily excludes the net unrealized gain on derivative contracts and non-ARO plugging and abandonment costs. Despite the losses, W&T’s Adjusted EBITDA grew by 9% quarter-over-quarter to $35.2 million. The company’s performance indicates that while earnings were negative, operational and financial improvements are evident. However, the EPS remains negative, indicating a continued financial challenge for the company.

Price Action
The stock price of W&T Offshore edged up 2.98% during the latest trading day but dropped 7.49% during the most recent full trading week and declined 2.26% month-to-date.

Post Earnings Price Action Review
The strategy of buying WTI crude oil futures upon revenue beats and holding for 30 days shows potential but requires careful consideration and backtesting. W&T Offshore reported a quarterly revenue of $122.37 million for Q2 2025, which missed estimates by 10.62%. However, this beat the previous quarter's revenue, indicating a potential seasonal trend or operational improvement. The stock initially reacted positively to the earnings report with a 42.86% earnings surprise. This suggests the market may have anticipated a recovery in WTI’s financial performance. Holding the position for 30 days could capture potential gains if the positive trend continues. However, this strategy exposes the position to downside risks if market sentiment shifts or company operational issues persist. Before implementing this strategy, thorough backtesting is essential to analyze historical data and determine the frequency and impact of revenue beats on WTI's stock price and related futures markets. Considering the volatility of crude oil prices and their correlation with WTI’s stock performance ensures the strategy is robust against market fluctuations. Risk management is crucial, so setting clear parameters, such as stop-loss orders, is necessary to limit potential losses. Diversifying the portfolio mitigates the impact of a single security’s volatility, especially in a commodity-focused strategy. Technical analysis tools, such as moving averages and trend indicators, can refine entry and exit points. Monitoring price charts and trading volumes gauges market sentiment and momentum. While the strategy has logical basis, it should be thoroughly backtested and risk-managed to ensure it aligns with investment goals and risk tolerance.

CEO Commentary
Tracy W. Krohn, Chairman of the Board and Chief Executive Officer, highlighted strong operational and financial performance, including a 10% production increase and 9% Adjusted EBITDA growth quarter-over-quarter. He emphasized W&T’s focus on Free Cash Flow and Adjusted EBITDA through operational excellence, production optimization, and cost management. The CEO noted the successful integration of assets from the Cox acquisition, which is expected to continue boosting production in the second half of 2025. He expressed confidence in the company’s ability to generate returns and strengthen its balance sheet through acquisitions and disciplined execution, with over $120 million in cash and a recently issued 10.75% Notes offering.

Guidance
The company expects production growth in the second half of 2025 from the integration of the remaining two fields acquired in the Cox transaction and anticipates continued operational enhancements through cost-effective workovers. Forward-looking guidance includes production within existing ranges and continued focus on Free Cash Flow generation. The company added a costless collar hedge for 2,000 barrels per day from July through December 2025, with a floor price of $63.00 per barrel and a ceiling of $77.25 per barrel. The company declared a third-quarter 2025 dividend of $0.01 per share, maintaining its consistent dividend payment pattern.

Additional News
W&T Offshore announced two significant surety-related developments in June 2025. First, the company reached a settlement agreement with two of its largest surety providers, covering nearly 70% of its surety bond portfolio. This agreement dismissed all claims against W&T and restricted the surety providers from making additional collateral demands or increasing premiums until December 31, 2026, unless under limited circumstances involving unlikely events of default. Additionally, a U.S. Magistrate Judge recommended denying preliminary injunction motions from two other surety companies, which had sought to monetize over $100 million in collateral. The court found the sureties failed to demonstrate they would suffer irreparable harm if their cash collateral demands were not granted. W&T will not be required to post collateral until a determination on the merits of the remaining lawsuit. These developments provide financial stability and certainty to W&T, reducing potential disruptions to its operations.