Q1 2024 W&T Offshore Inc Earnings Call
Operator: Ladies and gentlemen, thank you for standing by, and welcome to the W&T Offshore First Quarter 2024 conference call. During today's call, all parties will be in a listen-only mode. Following the company's prepared comments, the call will be open to questions and answers. During the question and answer session, we ask that you limit your questions to one and one follow-up, and you can always rejoin the queue.
Ladies and gentlemen, thank you for standing by and welcome to the W. N T offshore first quarter 2024 conference call. During today's call all parties will be in a listen only mode. Following the company's prepared comments the call will be opened for questions and answers.
A question and answer session. We ask that you limit your questions to one and one follow up and you can always rejoin the queue.
Operator: This conference call is being recorded, and a replay will be made available on the company's website following the call. I would now like to turn the call over to Mr. Al Petrie, the Investor Relations Coordinator. Please go ahead, sir. Thank you, Chuck.
This conference call is being recorded and a replay will be made available on the company's website following the call.
I would now like to turn the conference over to Mr. Al Petrie Investor Relations coordinator. Please go ahead, Sir Thank you Chuck and on behalf of the management team I'd like to welcome all of you to today's conference call to review Jive N T offshore its first quarter 2024 financial and operational results before we begin I would like to remind you.
Al Petrie: Thank you, Chuck. And on behalf of the management team, I'd like to welcome all of you to today's conference call to review W&T Offshore's first quarter 2024 financial and operational results. Before we begin, I would like to remind you that our comments may include hard-looking statements. It should be noted that a variety of factors could cause W&T's actual results to differ materially from the anticipated results or expectations expressed in these forward-looking statements.
Al Petrie: But our comments may include forward looking statements. It should be noted that a variety of factors could cause <unk> actual results to differ materially from the anticipated results or expectations expressed in these forward looking statements. Today's call may also contain certain non-GAAP financial measures. Please refer to the earnings release.
Al Petrie: Today's call may also contain certain non-GAAP financial measures. Please refer to the earnings release that we issued on Friday for disclosures on forward-looking statements and reconciliations of non-GAAP measures. With that, I would like to turn the call over to Tracy Krohn, our Chairman and CEO.
Al Petrie: <unk> that we issued Friday for disclosures on forward looking statements and reconciliations of non-GAAP measures with that I would like to turn the call over to Tracy Krohn, our chairman and CEO.
Tracy W. Krohn: Thanks, Al, and good day to everyone. And thanks for joining us on our conference call. So joining us today are William Williford, our Executive VP and Chief Operating Officer, Sameer Parasnis, our Executive VP and Chief Financial Officer, and Trey Hartman, our Vice President and Chief Accounting Officer. They'll be available to answer questions later during the call.
Tracy W. Krohn: Thanks, Al and good day to everyone and thanks for joining us on our conference call.
Tracy W. Krohn: So joining us today are William Williford, our executive VP, and Chief operating officer severe for us.
Tracy W. Krohn: Our executive VP, and Chief Financial Officer, and Troy Hartman, Our Vice President and Chief Accounting Officer.
Tracy W. Krohn: They'll be available to answer questions later during the call.
Tracy W. Krohn: So we began 2024 with another quarter of solid operational and financial results while continuing to execute our strategic vision. We focus on generating free cash flow, maintaining and optimizing high-quality conventional assets, and opportunistically capitalizing on accretive opportunities to build shareholder value. We have a strong balance sheet, and because of our focus on generating free cash flow, we continue to build cash on hand. We have generated positive free cash flow every quarter for over six years now because we know that cash is king, and it provides us with an opportunity and the optionality to capitalize on other opportunities.
Tracy W. Krohn: So we began 2024 with another quarter of solid operational and financial results, while continuing to execute our strategic vision.
Tracy W. Krohn: We focus on generating free cash flow, maintaining and optimizing high quality conventional assets and opportunistically capitalizing on accretive opportunities to build shareholder value.
Tracy W. Krohn: So we have a strong balance sheet and because of our focus on generating free cash flow, we continue to build cash on hand.
Tracy W. Krohn: We have generated positive free cash flow every quarter for over six years now because we know cash is king and it provides us an opportunity.
Tracy W. Krohn: And the Optionality to capitalize on other opportunities.
Tracy W. Krohn: We prioritize operational excellence, cost-controlling initiatives, prudent capital spending, and maximizing the value of our prolific asset base to deliver strong production and meaningful adjusted EBITDA. In addition, it's our ability to successfully and seamlessly integrate producing property acquisitions that's helped W&T grow during our 40-plus year history. In the first quarter, we had a number of accomplishments that demonstrate how successfully we were executing that strategy. So, in January 2024, we acquired operatorship and 100% working interest in six shallow Gulf of Mexico fields for $77.2 million that are adjacent to our existing operation. The impact of this acquisition could immediately be seen in our results. We reported production of over 35,000 barrels of oil equivalent per day.
Tracy W. Krohn: We prioritize operational excellence cost controlling initiatives initiatives prudent capital spending and in maximizing the value of our prolific asset base to deliver strong production and meaningful adjusted EBITDA and.
Tracy W. Krohn: So in addition, it's our ability to successfully and seamlessly integrate producing property acquisitions has helped WT grow during a 40 plus year history.
Tracy W. Krohn: In the first quarter, we had a number of.
Tracy W. Krohn: Accomplishments that demonstrate how successfully we are executing that strategy.
Tracy W. Krohn: So in January 2024 required upward to shift from 100% working interest in six shallow Gulf of Mexico fields for $77 $2 million that are adjacent to our existing operations.
Tracy W. Krohn: The impact of this acquisition could immediately be seen in our results. We reported production of over 35000 barrels oil equivalent per day, that's above the midpoint of our guidance range.
Tracy W. Krohn: That's above the midpoint of our guiding range and up 3% from the fourth quarter. And more importantly, we increased oil production by about 15% compared to the fourth quarter. Now this helped us increase adjusted EBITDA to $49.4 million, that's a 10% increase quarter over quarter, which outpaced the 3% increase in production over the same period and benefited from higher oil production. So we remain focused on cost control. In the first quarter, we recorded lease operating expenses below the low end of our guidance, which was due in part to some deferrals of work in facilities work.
Tracy W. Krohn: Up 3% from the fourth quarter.
More importantly, we increased oil production by about 15% compared to the fourth quarter.
Tracy W. Krohn: This helped us increased adjusted EBITDA to $49.4 million, that's a 10% increase quarter over quarter, which outpaced threatening 3% increase in production over the same period.
And benefited from higher oil production.
So we remain focused on cost control in the first quarter, we recorded lease operating expenses below the low end of our guidance, which was due in part to some deferrals of work on Workover and facilities work.
Tracy W. Krohn: We generated $32 million in free cash flow, more than double what we generated in the fourth quarter. We continue returning cash to our shareholders, paying another dividend in the first quarter, and announcing the second quarter 2024 payment will occur later this month. Well, the first quarter of 2024 marked the 25th consecutive quarter that we've generated free cash. Coupled with our cash on hand and our ATM offering of approximately $83 million, we're in a very good financial position for 2024, and we remain focused on operational execution to build on these solid returns.
Tracy W. Krohn: We generated $32 million in free cash flow more than double what we generated in the fourth quarter.
Tracy W. Krohn: We continued returning cash to our shareholders paying another dividend in the first quarter and announced the second quarter 'twenty 'twenty four payment will occur later this month.
Tracy W. Krohn: So the first quarter of 2024 marked the 25th consecutive quarter that we've generated free cash flow coupled with our cash on hand, and our ATM offering of approximately $83 million. We're in a very good financial position and 20 children for and we remain focused on operational execution to build on these solid results.
Tracy W. Krohn: Now, with over 40 years of experience integrating assets into our base, we've proven that the near-term costs are well worth it to realize the long-term potential of the newly acquired assets to generate cash flow for us for many years to come. Regarding the Cox asset acquisition, we've made good progress integrating these new assets into W&T, but we still have more work to do that we expect will increase production from these fields. We hired select Cox offshore personnel while completing all required regulatory transfers of operatorship, lease ownership, and financial responsibility.
Tracy W. Krohn: Now with over 40 years of experience integrating assets and into our into our base. We've proven that the near term costs are well worth it.
Tracy W. Krohn: Realize the long term potential of the newly acquired assets to generate cash flow for us for many years to come.
Tracy W. Krohn: Regarding the Cox asset acquisition, we've made good progress integrating these new assets into WD, but we still have more work to do that we expect will increase will increase production from these fields, we hired select Cox offshore personnel, while completing all required regulatory transfers of operator ship.
Tracy W. Krohn: Lease ownership and financial responsibility.
Tracy W. Krohn: Our teams worked hard integrating accounting, production reporting, cost tracking, and other data into our existing system. In addition, we've worked really hard to inspect all aspects of the field to ensure W&T's health, safety, and environmental norms are implemented, and we're negotiating midstream services at the newly acquired field. We saw significant growth in our oil production during the first quarter attributed to the new fields, and we will continue to focus on increasing our production, particularly our oil production, and managing those operational costs. I also want to mention that three of the newly acquired fields were shut in during the first quarter. As a result, their expected positive impact hasn't been reflected in our operational and financial results.
Tracy W. Krohn: Our teams worked hard integrating accounting production reporting cost tracking and other data into our existing systems and in addition, we've worked really hard to inspect all aspects of the field to ensure diabetes health safety and environmental norms are implemented and when negotiating midstream services at the newly acquired.
Tracy W. Krohn: Feared fields.
Tracy W. Krohn: We saw a significant growth in our oil production in the first quarter were attributed to the new fields and we will continue to focus on increasing our production, particularly our oil production and managing those operational costs also wanted mission that three of the newly acquired fields.
Tracy W. Krohn: Were shut in during the first quarter as a result are expected positive impact hasn't been reflected in our operational and financial results.
Tracy W. Krohn: We're clearly focused on bringing these assets online so that W&T can benefit from the full potential of all these assets. To give you a sense of how prolific we think these assets will be, I just need to point to the updated third-party year-end engineering report on these assets. Proved SEC reserves were 21.8 million barrels of oil equivalent, which is about 17 percent higher than our expected amount when we announced the acquisition.
Tracy W. Krohn: We're clearly focused on bringing these assets online so a deputy can benefit from the full potential of all these assets.
Tracy W. Krohn: To give you a sense of how prolific we think these assets will be I just need to point the upgraded third party a year in engineering reported on these assets.
Proved SEC reserves were 21 8 million barrels of oil equivalent, which is about 17% higher than our expected amount when we announced the acquisition.
Tracy W. Krohn: So, as you can see, we believe there's tremendous potential in these assets. In addition to the production boost from the new assets, during the first quarter of 2024, we performed three workovers and three recompletions that positively impacted production for the quarter. We will continue performing these low-cost, short payout operations that impact both production and revenue and help to offset natural decline. In our earnings release, we provided our second-quarter guidance.
Tracy W. Krohn: So as you can see we believe there's a tremendous potential in these assets.
Tracy W. Krohn: In addition to the production boost from the new assets during the first quarter of 2024, we project. We performed three Workovers and three we have completions that positively impacted production for the quarter. We will continue performing these low cost short payout operations the impact both production and revenue and helped to offset natural decline.
Tracy W. Krohn: So in our earnings release, we provided our second quarter guidance.
Tracy W. Krohn: We're projecting production to be around the same range as the first quarter. Second quarter 2024 production guidance reflects some expected shut-ins of selected fields due to third-party maintenance work. We do plan to spend more on lease operating expense in the second quarter as we undertake some of the projects we deferred in the first quarter, and also the weather's better, which makes it easier to work on. We continue to work on bringing the other three acquired fields back online to help increase operational and financial results.
Tracy W. Krohn: We're a product we're projecting production to be around the same range as the first quarter second quarter 2024 production guidance reflects some expected shut ins of selected fields due to third party maintenance work.
Tracy W. Krohn: We do plan to spend more on lease operating expense in the second quarter as we undertake some of the projects were deferred in the first quarter and also the weather's better makes it easier to to work on we continue to work on bringing the other three acquired fields back online to help increase operational and financial results. This time, we think our full year 2024. These opera.
Tracy W. Krohn: This time, we think our full-year 2024 lease operating expense will be about $23 per barrel of equipment. So for CapEx, we continue to expect to invest $35 to $45 million in 2024, that's excluding acquisitions. And we incurred about $3.2 million in the first quarter.
Tracy W. Krohn: <unk> expense will be about $23 per barrel oil equivalent.
So for Capex, we continue to expect to invest.
Tracy W. Krohn: $35 million to $45 million in 2024, that's excluding acquisitions.
Tracy W. Krohn: And we incurred about $3.2 million in the first quarter is expect these expenditures are directed primarily to facilities projects on our existing fields and the fields acquired late 'twenty early 'twenty 'twenty four to maximize and optimize production.
Tracy W. Krohn: These expenditures are directed primarily to facilities projects on our existing fields and the fields acquired in late 23 and early 2024 to maximize and optimize. So, before closing, I'd like to sincerely thank our team at W&T, as we're well positioned to add value throughout 2024 and beyond. Our strong balance sheet allowed us to close on the Cox acquisition, utilizing a portion of our cash on hand, and we remain focused on expanding our robust cash balance of almost $100 million.
Speaker Change: So before closing I'd like to sincerely. Thank our team at W. T.
Speaker Change: We're well positioned to add value throughout 2024, and beyond our strong balance sheet allowed us to close on the Cox acquisition.
Speaker Change: Utilizing a portion of our cash on hand, and we remained focus on expanding our robust cash balance of almost $100 million.
Tracy W. Krohn: In early 23 and late 22, we were focused on managing our debt, paying off our second lien. And we struggled with whether we should pay off all of that second lien at that time or should we..., paid off and reissued another $275 million to maintain liquidity.
Speaker Change: And in early 'twenty three in late 'twenty, two we were focused on managing our debt and paying off our second lien and we struggled with should we pay off all of that second lien at that time or should we.
Speaker Change: Pay it all off and reissue another 275 million to maintain liquidity that turns out to have been the proper decision and you can see that from the acquisitions that we've made so we continue to.
Tracy W. Krohn: That turns out to have been the proper decision, and you can see that from the acquisitions that we've made. So we continue to plan on utilizing our significant cash position and expertise in acquiring complementary Gulf of Mexico assets to enhance the scale of W&T. Those acquisitions remain a key component of our success, and it's our ability to integrate and enhance those assets that we acquire that has allowed us to grow our reserves and production over the past 40 years.
Plan on utilizing our significant cash position and an expertise in acquiring complementary Gulf of Mexico assets to enhance the scale of W. E T.
Speaker Change: Acquisitions remain a key component of our success and it's our ability to integrate and enhance those assets that we acquired there has allowed us to grow reserves and production over the past 40 years. We also remain committed to increasing shareholder value and returning value to our shareholders through quarterly dividend program that we initiated in November two.
Tracy W. Krohn: We also remain committed to increasing shareholder value and returning value to our shareholders through the quarterly dividend program that we initiated in November 2023. We believe in our proven strategy, and we expect to continue to execute operationally and financially in 2024 and beyond. So, as the company's largest shareholder, I believe W&T is very well positioned to succeed. Our entire management team's interests are highly aligned with those of our shareholders, given our 34% stake in W&T's equity, which is one of the highest of any public E&P company. We're focused on operational excellence and maximizing the cash flow potential of our asset base. With that outbreak behind us, we can now open the lines for questions. Yes, sir.
Speaker Change: 23.
Speaker Change: We believe in our proven strategy and we expect to continue to execute operationally and financially in 2024 and beyond.
Speaker Change: So as the country's largest shareholder I believe <unk> is very well positioned to succeed our entire management teams interests are highly aligned with those of our shareholders given our 34% stake in Wg's equity.
Which is one of the highest of any public E&P company.
Speaker Change: We're focused on operational excellence and maximizing the cash flow potential of our asset base.
Speaker Change: And with that operator, we can now open the lines for questions.
Operator: Yes, sir. We will now begin the question and answer session. To ask a question, you may press star then 1 on your touch-tone phone. If you're using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star then 2. And at this time, we'll pause momentarily to assemble our roster. And the first question will come from John White with Roths Capital. Please go ahead.
Yes, Sir we will now begin the question and answer session.
Speaker Change: To ask a question you May Press Star then one on your Touchtone phone.
Speaker Change: If you are using a speakerphone please pick up your handset before pressing the keys.
Speaker Change: If anytime your question has been addressed and you would like to withdraw your question. Please press Star then two.
Speaker Change: And at this time, we'll pause momentarily to assemble our roster.
Speaker Change: And the first question will come from John White with Roth Capital. Please go ahead.
John Marshall White: Good morning, everyone, and congratulations on the nice results. Thanks. Good morning, John. Yeah, good morning. I noticed on the guidance that the new guidance, gathering and transportation, and G&A were a little lower than I had in my estimates. Do you want to comment on that?
John Marshall White: Good morning, everyone and congratulations on the nice results.
John Marshall White: Thanks, Good morning, Jeff.
John Marshall White: Yeah. Good morning, I noticed on the guidance the new guidance.
John Marshall White: Gathering and transportation and G&A were a little lower than I had.
John Marshall White: In my estimates do you want to comment on that.
Tracy W. Krohn: Yeah, some of that reason is because we have some of that production still shut in, and that reflects some of that. We're negotiating somewhat on some of the midstream issues around that, and there's still maintenance that we need to do on some of that property.
Yes. Some of that reason is because we have some of that production is still shut in.
John Marshall White: Yes.
John Marshall White: And that reflects some of that were.
Speaker Change: We're negotiating somewhat on some of the.
Speaker Change: The midstream.
Speaker Change: Issues around that.
Speaker Change: And there is still maintenance that we need to do on some of that property.
Tracy W. Krohn: and the lower G&A.
Speaker Change: And the lower G&A.
Speaker Change: Yeah.
Speaker Change: Go ahead.
Tracy W. Krohn: Look, GNA was slightly higher than the midpoint just because of some one-off costs that we had. But again, we maintain our guidance for the full year, and we don't expect that to change.
Speaker Change: Look the G&A was.
Speaker Change: Slightly higher than the mid point is because of some one off costs that we have but again, we maintain our guidance for the full year. We don't expect that to change yeah. It's not unusual for us to see a little increase in <unk>.
Tracy W. Krohn: It's not unusual for us to see a little increase in LOE and G&A with acquisitions in the initial part of the production curve moving forward. It helps us to bring the facilities up to standard, hire the right people, and we want to take a little care in doing that. Get it right the first time, then you don't have to mess with it as much further down the line.
Speaker Change: LOE and G&A.
Speaker Change: With acquisitions in the initial part of the.
Speaker Change: Production curve going forward it.
It helps us to bring the facilities up to standard hire the right people.
Speaker Change: We wanted to take a little share in doing that.
Speaker Change: The first time, you'll have to mess with as much further on down the line.
John Marshall White: I thought the numbers looked good. Thank you, and I'll pass them on to the operator.
Speaker Change: I thought the numbers look good.
Speaker Change: Thank you and I'll pass it back to the operator.
Alright. Thanks.
Operator: The next question will come from Jeff Robertson with Water Tower Research. Please go ahead.
Speaker Change: The next question will come from Jeff Robertson with water Tower Research. Please go ahead.
Jeffrey Robertson: Thank you Tracy on the Cox assets.
Jeffrey Robertson: Tracy, you own the Cox Assets. How long does it typically take to evaluate what kind of remediation work you need to do to bring the assets up to standards you're comfortable with and then also to quantify and put a plan together for any kind of development or recompletion work to enhance the production profile of the assets?
Jeffrey Robertson: How long does it typically take to.
Jeffrey Robertson: Evaluate what kind of remediation work you need to do to bring the assets up to standards, you're comfortable with and then also to quantify.
Jeffrey Robertson: And put a plan together for.
Jeffrey Robertson: Any kind of development of a re completion work to enhance the production profile of the assets.
Tracy W. Krohn: Yeah, normally it takes a few months, Jeff. In this particular case, there wasn't the normal kind of care that we see in making these types of acquisitions. This company, the predecessor, Cox, went into bankruptcy.
Speaker Change: Yes normally it takes a few months Jeff.
Speaker Change: This particular case.
Speaker Change: There wasn't.
Speaker Change: The normal kind of care.
Speaker Change: See in making these types of acquisitions this.
Speaker Change: This company the predecessor products went into bankruptcy.
Tracy W. Krohn: And, you know, the maintenance wasn't what we normally would expect to see. So as a result, we're having to do some remediation, primarily around corrosion, and that's taking a bit of time. It's not anything dangerous or anything, it's just something that needs to get done. And the regulatory agency certainly recognizes it, and we do too. So we're making sure that everything gets done. I think that, long-term, that's a better strategy to make sure that we handle all the operating issues on the front end, spend a little extra money to generate better revenues, and better safety conditions going forward.
Speaker Change: No the maintenance one wasn't what we.
Speaker Change: No normally we would expect to see.
Speaker Change: So as a result, we're having to do some remaining remediation primarily around corrosion and that's taken a bit of time, it's not it's not.
Speaker Change: Anything dangerous or anything, it's just something that needs to get done.
Speaker Change: And the regulatory agency certainly recognizes we do too.
Speaker Change: So we're making sure that all gets done I think that long term, that's a better strategy to to make sure that we handle all the.
Speaker Change: Operating issues on the front end spend a little extra money.
Speaker Change: To generate better revenues.
Speaker Change: And a better safety conditions going forward.
Tracy W. Krohn: Tracy, you talked on the year-end earnings call about the potential of forming a drilling partnership that would include or could include Holy Grail. Can you provide any kind of an update on where that effort stands? Yeah, really good question.
Speaker Change: Tracy can talk to on our year end earnings call about the potential of forming a drilling partnership that would include or could include the Holy Grail can.
Speaker Change: Can you provide any kind of an update on where that effort stands.
Tracy W. Krohn: Yeah, really good question. Again, as I said earlier, we struggled a little bit with late 22 and whether we should just go ahead and pay off all the debt that we had in the second lien and not do another issuance. We ultimately decided to go ahead and redeem all those notes and do another new issuance for 275 million, just to make sure that we had additional liquidity. And that was the right decision. So as we look at the situation going forward, we see the ability to make more acquisitions and grow the company from that methodology. Thank you.
Tracy W. Krohn: Yeah really good question.
Tracy W. Krohn: We were we are again as I said earlier, we struggled a little bit with.
Late 'twenty two.
Tracy W. Krohn: And whether we should just go ahead and pay off all the debt that we had in the second lien and not do another issuance.
Speaker Change: We ultimately decided to go ahead and.
Speaker Change: Redeem all those notes and do another a new issuance for $275 million just to make sure that we had additional liquidity.
Speaker Change: And that that was the right decision.
Speaker Change: So as we as we look at the situation going forward.
Speaker Change: We see the ability to make more acquisitions in and grow the company from that methodology.
Thank you.
Operator: Again, if you have a question, please press star, then 1.
Speaker Change: Again, if you have a question. Please press Star then one.
Tracy W. Krohn: Jeff, you know, and I'm sorry, I didn't directly answer your question with regard to drilling. We did focus on making the acquisitions. That's why we haven't unveiled the drilling joint venture. We mentioned it. We told the shareholders and potential investors and investors that we would probably defer it for about a year.
Speaker Change: Jeff.
Jeffrey Robertson: I'm, sorry, I didn't directly answer your question with regard to drilling.
Speaker Change: We did.
Speaker Change: We did focus on making the acquisitions Thats why we havent.
Speaker Change: On the drilling joint venture we mentioned it we were told.
Speaker Change: Shareholders and <unk>.
Speaker Change: Potential investors and investors that we would we would probably defer for about a year.
Speaker Change: We are looking at that now and we're putting together that program.
Tracy W. Krohn: We are looking at that now, and we're putting that program together. It's going to be relatively extensive. I'm very encouraged by what I'm seeing. We are seeing interest in the program. We'll start off at Holy Grail still looking for Approving Reserves, actually, initially, and it looks like that's still a go for next year and possibly sooner if we get all the program put together in time, but I'm relatively pleased with the quality of not only the proven reserves that we're looking for but also the exploratory potential of several of these projects that are really, really, very large. So, I'm expecting a drilling program in the range of $500 million to a billion dollars to drill, complete, and hook up.
Speaker Change: It's going to be relatively extensive.
Speaker Change: I'm.
I am very encouraged by it but what I am saying we are seeing.
Speaker Change: Interest in the program, we will start off at Holy Grail still.
Speaker Change: Looking for.
Speaker Change: Proven reserves actually initially.
Speaker Change: It looks like.
That's still a go for.
Speaker Change: Next year.
Possibly.
Speaker Change: If we get all the program put together in time.
Speaker Change: But.
Speaker Change: Uh huh.
Speaker Change: I'm relatively pleased with the quality of.
Speaker Change: Not only the <unk>.
<unk> reserves that were looking for but also the exploratory potential of several of these projects that are really really good.
Speaker Change: Fairly large.
Speaker Change: So I am expecting.
Speaker Change: Drilling.
Program in the range of $500 million to $500 million to $1 billion drill.
Speaker Change: <unk> hookup.
Operator: And there are no further questions appearing at this time, so this will conclude our question and answer session. And I would like to turn the conference back over to Mr. Tracy Krohn for any closing remarks.
Speaker Change: And there are no further questions showing at this time. So this will conclude our question and answer session and I would like to turn the conference back over to Mr. Tracy Krohn for any closing remarks.
Tracy W. Krohn: Ladies and gentlemen, we appreciate your interest in W&T. We will continue to work hard to make sure that we're increasing production reserves and cutting costs. Those are really the primary things that we need to do and work toward every day. I do want to thank the team. They've done a really good job under difficult conditions. The latest acquisition that came out of bankruptcy, nobody's ever happy during bankruptcy, understandably so, but it does have a nice outcome for us.
Tracy W. Krohn: Ladies and gentlemen, we appreciate your interest in W. T.
Tracy W. Krohn: We will continue to work hard to make sure that we're we're increasing production reserves and cutting costs.
Tracy W. Krohn: We are the primary things that we need to do.
Tracy W. Krohn: And work towards every day I do want to thank the team they've done a really good job under difficult conditions with.
Tracy W. Krohn: The latest acquisition.
Tracy W. Krohn: That came out of bankruptcy.
Tracy W. Krohn: Nobody is ever happy during bankruptcy.
Tracy W. Krohn: And.
Tracy W. Krohn: Understandably so but.
Tracy W. Krohn: It does have a nice outcome for us and we look forward to continuing to develop these assets.
Operator: And we look forward to continuing to develop these assets and also to looking at other assets to acquire. So, thank you for your attention. We'll talk to you again soon. The conference is now concluded. Thank you for attending.
Tracy W. Krohn: And continue to also look at other assets to acquire so thank you for your attention we will talk to you again soon.
Operator: The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.
Speaker Change: The conference has now concluded. Thank you for attending today's presentation you may now disconnect.
Speaker Change: Yes.
Speaker Change: [music].
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