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What Were W&T Offshore’s Production Costs and Margins for 3Q16?

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W&T Offshore’s production costs and margins

Excluding hedges, in 3Q16, W&T Offshore (WTI) reported a positive cash margin but a negative total margin, as the chart below shows.

In 3Q16, W&T Offshore didn’t receive any cash receipts on derivative settlements. So W&T Offshore failed to increase its cash margin or reduce the deficit in its total margin despite hedges, as the chart below shows.

For 3Q16, other upstream companies like Diamondback Energy (FANG) and EOG Resources (EOG) have also reported positive cash margins.

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Definitions

Production cash cost equals lease operating expenses, plus production and ad valorem taxes, plus transportation expenses, plus general and administration cash expenses, plus interest expenses.

Total production cost equals cash cost plus depletion, depreciation, and amortization, plus other non-cash expenses.

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