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Analyzing W&T Offshore’s 4Q16 Revenue Expectations

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Revenue estimates

In 4Q16, Wall Street analysts expect W&T Offshore (WTI) to report ~14% higher revenue than it did in 4Q15. Also, W&T Offshore’s 4Q16 revenue expectation is ~11% higher than its revenue in 3Q16.

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W&T Offshore’s 3Q16 revenue performance

In 3Q16, W&T Offshore missed the revenue estimate of ~$110 million by ~2%. It reported a steep fall in YoY (year-over-year) revenue growth, of ~15%. All of W&T Offshore’s revenue in 3Q16 came from crude oil, natural gas, and natural gas liquid production sales.

A steep decline in production volumes coupled with lower realized prices for crude oil production impacted W&T Offshore’s revenue growth. In 3Q16, W&T Offshore’s production volumes fell ~11% to ~3.8 MMBoe (million barrels of oil equivalent) from ~4.3 MMBoe in 3Q15. In 3Q16, W&T Offshore’s realized price fell ~3% to $27.97 per boe (barrel of oil equivalent) from $28.92 per boe in 3Q15.

Peers Devon Energy (DVN), ConocoPhillips (COP), and Marathon Oil (MRO) reported revenue of $2.9 billion, $6.5 billion, and $1.2 billion, respectively, in 3Q16. The Energy Select Sector SPDR ETF (XLE) invests at least 95% of its total assets in oil and gas companies.

Fiscal 2016 revenue estimates

In fiscal 2016, Wall Street analysts expect W&T Offshore to report revenue of ~$408 million, ~20% lower than the ~$507 million reported in 2015. W&T Offshore’s yearly revenue has been falling since 2014. Next, let’s take a look at W&T Offshore’s production.

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