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Analyzing W&T Offshore’s 4Q16 Revenue

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4Q16 revenue

For 4Q16, W&T Offshore (WTI) reported revenue of ~$115 million, ~3% lower than Wall Street analysts’ consensus estimate of ~$119 million.

For 4Q16, WTI reported crude oil revenue of ~$75 million, natural gas revenue of ~$31 million, and natural gas liquids revenue of ~$9 million. The majority (~65%) of WTI’s revenue came from crude oil sales.

Sequentially, WTI’s 4Q16 revenue was ~7% higher than its 3Q16 revenue. Year-over-year (or YoY), WTI’s 4Q16 revenue was ~10% higher than its 4Q15 revenue.

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Factors that impacted revenue

For upstream companies, revenue is dependent on production (USO) (UNG) volumes and realized production prices. For 4Q16, WTI reported production of 3.7 MMBoe (million barrels of oil equivalent). YoY, WTI’s 4Q16 production was 10% lower than it was in 4Q15. Sequentially, WTI’s 4Q16 production was 3% lower than it was in 3Q16.

Despite its lower production, WTI’s average realized prices for crude oil (USO) and natural gas (UNG) rose significantly, impacting its revenue positively. At $45.10 per barrel, WTI reported a ~22% higher realized crude oil price in 4Q16, compared to $36.99 per barrel in 4Q15. Even WTI’s natural gas average realized price rose sharply to $3.11 per Mcf (thousand cubic feet) in 4Q16, compared to $2.19 per Mcf in 4Q15.

2016 revenue

For 2016, W&T Offshore reported revenue of ~$400 million, ~21% lower than ~$507 million in 2015. WTI’s peer Devon Energy (DVN) reported revenue of ~$10.3 billion, ~22% lower than ~$13.2 billion in 2015.

Now let’s take a look at WTI’s lease operating expenses.

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