W&T Offshore Enhances Liquidity with Modifications to Term Loan with Munich Re
Oil and natural gas producer, W&T Offshore (NYSE: WTI), has announced modifications to the first-lien non-recourse term loan between its wholly-owned special purpose vehicles and Munich Re Reserve Risk Financing. The modifications are expected to provide additional liquidity to W&T during 2024 without increasing the company’s net leverage.
Tracy W. Krohn, W&T’s Board Chair and Chief Executive Officer, commented, “We are pleased to have enhanced our already-strong liquidity with a modification to our term loan with Munich Re that defers principal payments of around $30 million that would otherwise have been due in 2024. The collateral value of our Mobile Bay asset remains strong which helped facilitate this change in terms and demonstrates W&T’s track record as a prudent custodian of MRRF’s capital. Our strong liquidity position and ability to generate meaningful free cash flow continues to position W&T to pursue additional accretive acquisitions which has been the foundation of our strategy for many years.”
Highlights
The Term Loan initially had a principal balance of $215 million which has been amortized down to around $114 million as of December 31, 2023.
Effective extension of weighted average maturity by deferring principal payments of around $30 million that would have been due over the four quarters of 2024.
No change in coupon, which will stay at a 7.00% fixed rate, and cash interest will be due each quarter of 2024 on the remaining principal balance.
In the original transaction, the Company transferred 100% of its Mobile Bay Area producing assets and related gas treatment facilities to the SPVs in return for the net cash proceeds from a $215 million Term Loan amortized over seven years. Through its 100% ownership in the SPVs, W&T retains the upside value in the Mobile Bay Assets.
About W&T Offshore
W&T Offshore, Inc. is an independent oil and natural gas producer with operations offshore in the Gulf of Mexico and has grown through acquisitions, exploration and development. As of December 31, 2023, the Company had working interests in 53 fields in federal and state waters (which include 44 fields in federal waters and nine in state waters). The Company has under lease approximately 597,100 gross acres (440,000 net acres) spanning across the outer continental shelf off the coasts of Louisiana, Texas, Mississippi and Alabama, with approximately 435,600 gross acres on the conventional shelf, approximately 153,500 gross acres in the deepwater and 8,000 gross acres in Alabama state waters. A majority of the Company’s daily production is derived from wells it operates. For more information on W&T, please visit the Company’s website at www.wtoffshore.com.
